Tokyo stocks rebounded Tuesday, with sentiment brightened by rises in overseas markets.
The 225-issue Nikkei average snapped its three-session losing streak by advancing 284.69 points, or 0.99%, to finish at 29,027.94. On Monday, the key index gave up 121.07 points.
The Topix index of all first section issues closed 24.10 points, or 1.27%, higher at 1,917.68, after losing 2.60 points the previous day.
The market struggled for direction in the morning, as its topside was limited by selling of semiconductor-sector shares to lock in gains while its downside was supported by buying of cyclical stocks, such as automobiles and financials, on the back of economic recovery hopes, brokers said.
Buying took the upper hand in the afternoon in the wake of rises in U.S. Dow Jones Industrial Average futures in off-hours trading and in Chinese stocks, pushing up the Nikkei by over 300 points at one point.
With U.S. President Joe Biden’s $1.9 trillion coronavirus relief package now expected to come into effect shortly, investors’ hopes for an early U.S. economic recovery swelled, Kazuo Kamitani, strategist at Nomura Securities Co., said.
The dollar’s appreciation to nine-month highs above ¥109 also fueled buying sentiment, another brokerage house official said.
Meanwhile, Kamitani said that investors have increasingly focused their attention on next week’s policy-setting meeting of the Bank of Japan sine BOJ Deputy Gov. Masayoshi Amamiya’s online speech Monday.
In the speech, Amamiya suggested that the central bank tolerate wider fluctuations in the benchmark 10-year government bond yield.
This showed a stark contrast with BOJ Gov. Haruhiko’s remarks last week denying the need to let the key Japanese long-term interest rate move beyond the currently allowed range of between plus and minus 0.2%.
On the first section, gainers far outnumbered decliners 1,848 to 302, while 44 issues were unchanged. Volume increased to 1.621 billion shares from Monday’s 1.511 billion shares.
Among cyclicals that attracted active buying, Toyota rose 2.86% and banking group Sumitomo Mitsui Financial 2.12%.
Yakult Honsha soared 3.65%, after the lactic beverage-maker said that it has formed an alliance with 14 other firms over carbon-neutral liquefied natural gas.
On the other hand, chip-testing device-maker Advantest and other stocks in the semiconductor sector were hit by heavy selling following a plunge in the SOX Philadelphia semiconductor index Monday.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average gained 310 points to end at 29,070.
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