Tokyo stocks staged a sharp rebound on Tuesday after a Wall Street rally the day before.
The 225-issue Nikkei average of the Tokyo Stock Exchange surged 873.20 points, or 3.12%, to close at 28,884.13, snapping a four-day losing streak. On Monday, the key market gauge plunged 953.15 points.
The Topix index of all first section issues soared 60.08 points, or 3.16%, to finish at 1,959.53, rising for the first time in four trading days after a 47.11-point loss the day before.
The climb of all three key US market gauges on Monday heartened investors as they bought back Tokyo stocks from the outset of Tuesday’s trading, paring much of the losses from the previous day’s rout.
The upswing of Chinese and other Asian equities fueled further buying.
But the Tokyo market’s rise was capped in the afternoon as market players struggled for new trading incentives.
A steady advance of Dow Jones Industrial Average futures in off-hours trading kept the market mood upbeat, underpinning stock prices.
“A broad range of stocks attracted buying due to a sense that the market fell too much the day before,†an official at a Japanese securities firm said.
In reassessing the US Federal Reserve’s hawkish turn that pushed down stocks last week and Monday, market players have come to believe that early interest rate hikes by the Fed will not chill the US economy, said Maki Sawada, strategist at Nomura Securities Co.
But investors are still paying close attention to comments by Fed officials, including congressional testimony by Fed Chair Jerome Powell later on Tuesday, Sawada added.
The Bank of Japan’s purchase of exchange-traded funds the day before had little impact on market sentiment, although it was the first such buying in two months, brokers noted.
In the TSE first section, rising issues overwhelmed falling ones 2,107 to 69 while 17 issues were unchanged. Volume shrank to 1.173 billion shares from Monday’s 1.301 billion shares.
Shipping firms led the gains on the Nikkei, with Mitsui O.S.K. Lines spurting 10.19 percent after revising up its earnings forecast for the current fiscal year. Industry competitors Nippon Yusen and Kawasaki Kisen advanced 10.31 percent and 10.16%, respectively.
Banking names such as Mitsubishi UFJ grew after US long-term interest rates swung up.
Oil name Inpex rose after crude oil futures rose overnight.
Cyclicals such as warehousing and real estate issues also attracted buying.
Other major winners included job information provider Recruit Holdings and drugmaker Chugai.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average surged 730 points to end at 28,750.
https://www.japantimes.co.jp/news/2021/06/22/business/financial-markets/stocks-strong-rally/
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Category: Japan
