Tokyo stocks closed higher Tuesday as investors sought out bargains with sentiment bolstered by hopes for a new COVID-19 relief package in the United States.
The 225-issue Nikkei Stock Average added 391.25 points, or 1.39 percent, from Monday to close the day at 28,633.46.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 10.35 points, or 0.56 percent, to finish at 1,855.84.
Investors bought on dips and sought out issues that had retreated following the Nikkei’s rise to 30-year highs last week, local brokers said.
They added that investors were also on the hunt for issues of firms likely to report solid earnings, such as component makers and chip-oriented issues.
“After dropping about 450 points during the past two sessions, investors bought shares of companies expected to report good earnings, such as those related to chips and electronic parts,” Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co., was quoted as saying.
Selling was also propelled by hopes that the U.S. President-elect Joe Biden’s administration would roll out a sizable relief package, with issues also bought back following concerns a day earlier the market might be overheating, market strategists here said.
“Investors are buying back shares which were sold out of concerns for overheat yesterday,” Hideyuki Suzuki, general manager at investment research for SBI Securities Suzuki, was quoted as saying.
“Tuesday’s rise represents the fundamental strength of the Japanese market. It is moving on its own without being influenced by the U.S. market, which was closed yesterday,” Suzuki added.
By the close of play, rubber product, electric power and gas and air transportation issues comprised those that advanced the most.
Among chip-related issues finding favor, Advantest jumped 4.2 percent, while TDK added 2.8 percent.
Rohm Co. climbed 4.5 percent, Murata Manufacturing gained 2.5 percent, while Taiyo Yuden ended the day 7.7 percent higher.
Automakers accelerated on the yen’s retreat against the U.S. dollar, with Honda Motor gaining 1.7 percent, Nissan Motor rising 3.9 percent, while Mazda Motor leapt 5.5 percent.
Toyota Motor advanced 0.9 percent, while Suzuki Motor closed 3.9 percent higher.
Nikkei heavyweight Fast Retailing, operator of the Uniqlo chain of casual clothing stores, climbed 3.1 percent, following reports saying a payment function would be added to its smartphone app.
Issues that fell outpaced those that rose by 1,187 to 912 on the First Section, while 89 ended the day unchanged.
On the main section on Tuesday, 1,006.77 million shares changed hands, rising from Monday’s volume of 908.54 million shares.
The turnover on the second trading day of the week came to 2,193.06 billion yen (21.08 billion U.S. dollars).
XINHUA | TOKYO