Tokyo's Nikkei stock index closes 3.01pc higher

April 16, 2014 - 9:29:23 am

TOKYO: Tokyo's Nikkei stock index jumped 3.01 percent Wednesday as bargain-buying and a weaker yen lifted the Japanese market, following a rise on Wall Street bolstered by strong US corporate earnings.

The benchmark Nikkei 225, which tumbled 7.3 percent last week, added 420.87 points to finish at 14,417.68, while the Topix index of all first-section shares tacked on 2.68 percent, or 30.46 points, to 1,166.55.

Bargain-hunting helped drive Tokyo's strong gains, while shares of market heavyweight SoftBank soared 8.50 percent to 7,604 yen.

The jump came after Chinese e-commerce giant Alibaba -- in which SoftBank owns a 37 percent stake -- said fourth-quarter profit more than doubled to over $1.3 billion.

"There is some buying in baskets of stocks seen oversold after the steep sell off we saw last week," said an equity trading director at a foreign brokerage.

The yen declined -- which boosts exporters' profitability -- as Bank of Japan governor Haruhiko Kuroda said the country was on track to reach a 2.0 percent inflation target as Tokyo works to reverse years of falling prices and tepid growth.

In afternoon trading, the dollar rose to 102.25 yen from 101.94 yen in New York Tuesday afternoon.

Exporter shares soared with TDK jumping 4.05 percent to close at 4,615 yen while Honda gained 2.25 percent to 3,533 yen.

The Nikkei's Wednesday gain followed a rise of 0.62 percent on Tuesday, but analysts warned that the market's upside was less than solid.

"The Nikkei staged a minor bounce on Tuesday, but participation is not at the point where one could say traders are suddenly bullish," said Daisuke Uno, strategist at Sumitomo Mitsui Banking Corp.

Chinese data published Wednesday showed first-quarter growth slowed to 7.4 percent on-year, its lowest level in 18 months, but it had little impact on the Japanese market.

"The numbers were close enough to be called 'on target', but they're not exerting much influence on Japan shares today," Kenichi Hirano, market analyst at Tachibana Securities, told Dow Jones Newswires.

Investors remain jittery, however, over the situation in Ukraine as Russian President Vladimir Putin warned that it was now on the verge of civil war after the Kiev government sent in the army against separatists in the east of the country.

There are planned four-way talks on Ukraine on Thursday between top diplomats of Russia, the European Union, the United States and Ukraine.

Wall Street finished higher Tuesday after a wild swing lower led by tech stocks that saw the Nasdaq Composite index down nearly two percent at one point.

US stocks had opened strongly on good results from Johnson & Johnson and Coca-Cola but then sank, with analysts at the time citing a rise in worries over Ukraine.

The subsequent bounce-back left the Dow Jones Industrial Average up 0.55 percent, while the S&P 500 rose 0.68 percent and the Nasdaq put on 0.29 percent. (AFP)