Tokyo stocks rebound 2.65% by break


TOKYO: Tokyo stocks surged Friday morning, staging a rebound from the previous day’s plunge, the worst one-day drop for the benchmark Nikkei index since Japan’s March 2011 quake-tsunami disaster.

The Nikkei, which on Thursday tumbled 7.3 percent, was up 2.65 percent, or 383.92 points, at 14,867.90 by the break after jumping more than three percent in the first few minutes of trading.

The broader Topix index of all first-section shares was up 2.52 percent, or 29.90 points, at 1,218.24.

The morning rebound came after Wall Street slipped marginally overnight and the dollar held steady against the yen.

“The signs indicate that yesterday’s sell-off is not symptomatic of more endemic weakness,” said SMBC Nikko Securities general manager of equities Hiroichi Nishi.

Kenji Shiomura, strategist at Daiwa Securities, said Thursday’s plunge was a temporary correction to the recent fast-paced advances with investors taking a cue from weak Chinese data and other market-negative news.

“There has not been any grave event that could change corporate earnings outlooks and what happened yesterday should be a correction to the recent excessive rises,” he said.

“Looking ahead, the market will likely be on an uptrend on expectations of a recovery in company earnings.”

Japan Inc. wrapped up its latest corporate earnings season on a high note, with a weaker yen helping inflate earnings at some of the nation’s top exporters, making them more competitive overseas and increasing the value of repatriated foreign income.

The Nikkei has gained nearly 60 percent over the past six months under the pro-spending, pro-growth policies led by Prime Minister Shinzo Abe who took office in December after landslide elections.

Aggressive monetary easing by the Bank of Japan has helped pushed down the yen, which in turns tends to lift shares of Japanese firms.

Despite the upbeat sentiment among some analysts, others warned that Tokyo’s meteoric rise may stall going forward with a correction overdue.

The “slump is not necessarily the end of the bull market in Japanese equities, but the next few months will be much harder going”, London-based Capital Economics said in a note.

“We continue to expect the Nikkei to fall further, probably below 13,000, before the end of 2013.”

In New York the Dow Jones Industrial Average slipped 0.08 percent to 15,294.50 Thursday, little affected by a sharp sell-off in Asian and European markets led by the plunge in Tokyo.

“The steadiness in the US market was helped by better-than-expected data out of the US, including better than expected US new home sales… higher US house prices and a welcome pullback in jobless claims after last week’s unexpected rise,” National Australia Bank said.

In currency markets the dollar was trading at 102.28 yen in Asia morning trade, up from 101.82 yen in New York late Thursday.

The euro fetched $1.2915 and 132.11 yen against $1.2935 and 131.72 yen in US trade.

Sharp, which lost 13.14 percent the previous day, jumped 9.96 percent to 574 yen by the break, while Panasonic gained 3.38 percent to 916 yen.

Sony rose 1.62 percent to 2,194 yen as the electronics giant announced plans to raise 150 billion yen ($1.5 billion) by issuing five-year bonds.

Nissan rose 1.88 percent to 1,190 yen although the carmaker on Thursday announced plans to recall 841,000 compact cars worldwide due to a steering wheel problem.



Please follow our commenting guidelines.

Comments are closed.