Tokyo stocks bounce back to close higher on stimulus hopes

A man walks past an electronic stock board showing Japan's Nikkei 225 and other country's index at a securities firm in Tokyo on Tuesday (March 10). Asian stock markets are taking a breather from recent declines. Tokyo stocks rebounded from an earlier sell-off to close higher on Tuesday on investor hopes of domestic stimulus measures to alleviate volatility and underpin markets. - AP

TOKYO: Tokyo stocks rebounded from an earlier sell-off to close higher on Tuesday (March 10) on investor hopes of domestic stimulus measures to alleviate volatility and underpin markets amid similar moves in the United States also aimed at responding to the economic impact of the Covid-19 (coronavirus) outbreak.

The 225-issue Nikkei Stock Average added 168.36 points, or 0.85%, from Monday to end the day at 19,867.12.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, gained 17.71 points, or 1.28%, to finish at 1,406.68.

Trading got off to a downbeat start, local brokers said, as market sentiment was dented by US and European shares being offloaded overnight amid ongoing concerns of the global economic impact of rising numbers of Covid-19 infections.

The benchmark Nikkei stock index tumbled more than 800 points from the outset, diving below the 19,000-point level for the first time since December 2018, traders here highlighted.

But losses were recouped in later trade on hopes the Finance Ministry and the Bank of Japan will take the necessary measures to ensure liquidity and alleviate volatility in both financial and stock markets if deemed necessary, market analysts here said.

They added that similar hopes from the U.S. also helped underpinned bettering sentiment and saw investors unroll safe-haven positions, which saw the yen weaken against the US dollar, which is a boon for exporters who rely on a weaker currency to boost profits, and for the overall market.

"Short-covering kicked in as expectations grew for coordinated fiscal and monetary measures," Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co, was quoted as saying.

"There still is a risk of more market turmoil if countries fail to come up with specific measures," Fujito added.

In terms of the currency market, the dollar was quoted at 103.84-86 yen, compared with 102.29-30 yen in New York and 102.22-25 yen at 5pm on Monday in Tokyo.

As for the euro, it fetched US$1.1381-US$1383 and 118.18-22 yen against US$1.1425-US$1435 dollars and 116.98-117.08 yen in New York and US$1.1439-US$1441 dollars and 116.94-98 yen in late Monday afternoon trade in Tokyo.

As a result of the yen's retreat against the US dollar, exporters got a boost helping to recoup some of the market's earlier losses, with Sony adding 3.3%, while Mazda accelerated 3.7%. Subaru, meanwhile, closed the day 1.5% higher.

In contrast to the previous day, a rise in US Treasury yields saw bank-oriented issues gain ground, with Mizuho Financial Group advancing 2.8%, while Mitsubishi UFJ Financial Group closed the day 1.7% higher.

On the main section on Tuesday, 2.570 billion shares changed hands, rising from Monday's volume of 2.518 billion shares.

The turnover on the second trading day of the week came to 3,812.0 billion yen (US$36.42bil). - Xinhua/Asian News Network
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Tokyo , Stocks Rebound , Stimulus Measures


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