Tokyo stocks turn sharply higher as U.S.-Iran concerns recede
Tokyo stocks staged a steep rebound Tuesday on buybacks amid receding concern over an escalation of the U.S.-Iran tensions.
The Nikkei 225 average surged 370.86 points, or 1.60 percent, to end at 23,575.72. On Monday, the key market gauge tumbled 451.76 points.
The Topix, which covers all first-section issues on the Tokyo Stock Exchange closed 27.56 points, or 1.62 percent, higher at 1,725.05 after shedding 23.87 points Monday.
Investors rushed to repurchase stocks from the outset, in the wake of all three major U.S. market indicators turning moderately higher Monday and the yen going lower against the dollar, brokers said.
Selling of risk assets such as equities and the U.S. currency is over for now as there have been no signs of escalation of the geopolitical tensions produced by the killing of an Iranian general by the United States late last week, they said.
In the afternoon, the market gradually extended gains also aided by robust performance of other Asian stocks, although active buying was held in check.
“Seeing the U.S. market calm down, players here moved to buy back stocks that were sold in the midst of a growing risk-off mood the previous day,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management Co.
“The view that a full-fledged U.S.-Iran military clash is unlikely spread among investors,” noted Yutaka Miura, senior technical analyst at Mizuho Securities Co.
Miura also pointed out that some participants took to the sidelines in the afternoon to wait for the release later Tuesday of the U.S. Institute for Supply Management’s nonmanufacturing index for December.
On the first section, rising issues far outnumbered falling ones 1,961 to 146, while 54 issues were unchanged. Volume dropped to 1.157 billion shares, from 1.219 billion Monday.
Toyota, Honda and other automakers rose thanks to the weaker yen.
Fujifilm Holdings jumped 5.60 percent as SMBC Nikko Securities Inc. and Nomura Securities Co. raised their target stock prices for the technology firm.
Rakuten climbed 1.52 percent after Hiroshi Mikitani, president and chairman of the cybermall operator, told reporters Monday that the company would launch full mobile phone services in April.
Ramen restaurant chain Kourakuen Holdings and clothing store chain Fast Retailing drew buyers.
On the other hand, shipping firm Kawasaki Kisen and silicon wafer producer Sumco sank on selective selling.