Tokyo stocks rebounded Thursday, as investors bought back economically sensitive cyclical shares in view of lower interest rates and higher stock futures in the United States.
The 225-issue Nikkei average gained 324.36 points, or 1.14%, to close at 28,729.88, snapping its four-session losing streak. On Wednesday, the index sank 590.40 points.
The Topix index of all first-section issues advanced 26.97 points, or 1.40%, to finish at 1,955.55, following its slump for three consecutive market days until the previous day, when the broader index gave up 42.90 points.
The market opened higher despite a Wall Street drop Wednesday, with investors renewing buying sentiment for cyclicals and value stocks, which were particularly beaten down in the latest bear market.
Sentiment was brightened by a fall in U.S. long-term interest rates, brokers said.
Stocks got a boost late in the morning from Bank of Japan Gov. Haruhiko Kuroda’s parliamentary remarks assuring the central bank’s continued buying of exchange-traded funds, they added.
After struggling for direction, stocks extended gains in the afternoon thanks in part to rises in Chinese markets.
“U.S. stock futures’ steady rise in off-hours trading also prompted investors to buy back stocks,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co.
Masayuki Otani, chief market analyst at Securities Japan Inc., noted that the market staged a technical rally after its decline for days, which pushed down the Nikkei by more than 1,800 points.
He also pointed out that, bucking the overall uptrend, technology shares met with selling stemming from the tech-heavy Nasdaq composite index’s steep fall the previous day.
On the TSE first section, gainers overwhelmed decliners 1,925 to 228 while 40 issues remained flat. Volume fell to 1.243 billion shares from Wednesday’s 1.591 billion shares.
Reflecting the renewed investor appetite for cyclicals, shipping firm Kawasaki Kisen jumped 3.72% and Nippon Steel 3.45%.
Oils such as Inpex were boosted by a rise in crude oil prices caused by an accident in the Suez Canal.
Among other noticeable winners were megabanks including Mitsubishi UFJ and Sumitomo Mitsui Financial.
Meanwhile, tech investor SoftBank Group and chipmaking gear maker Tokyo Electron sank along with other technologies.
Truck-maker Hino Motors plunged 5.19%, after rivals Toyota and Isuzu announced revival of their capital tie-up.
In index futures trading on the Osaka Exchange, the key June contract on the Nikkei average climbed 430 points to end at 28,620.
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