TOKYO: Tokyo’s Nikkei benchmark rebounded to finish higher on Wednesday looking for bargains even as investors worried about a new strain of coronavirus and uncertainty surrounding a new US stimulus.
The Nikkei 225 ended a losing streak and rose 0.33%, or 88.40 points, to 26,524.79.
The larger Topix index added 0.23%, or 4.09 points, to close at 1,765.21.
The Tokyo market started the day on a solid footing, supported by the surge in the Nasdaq overnight, which ended at another record close.
Investors returned to buy after Tokyo fell for three consecutive sessions, SBI Securities said in a note.
But profit-taking and drops in US equity futures during the day weighed on the Tokyo market, SBI added.
The Nikkei plunged into negative territory mid-morning after US President Donald Trump rejected a new bipartisan stimulus bill worth $ 900 billion, calling it a “shame” and pushing lawmakers to broaden the scope of the back-up plan.
But the index quickly returned to positive territory, reflecting good investor appetite.
“The bargain hunt has helped the Nikkei remain well supported,” Okasan Online Securities said in a note.
But few investors were prepared to make aggressive purchases beyond the current range, leaving the Nikkei trapped in a narrow band, he added.
The dollar settled at 103.45, becoming softer 103.60 yen in New York on Tuesday.
The technical charts also highlighted downside risks to the Tokyo market, with concerns about the new variant of the virus also weighing on the market, analysts said.
Many global investors are also leaving the market for vacations, locking the Tokyo market into the current range.
Many major stocks zigzagged between positive and negative territory throughout the day, although some high-tech stocks benefited from the strength of the Nasdaq.
Advantest, a major producer of chip testing tools, jumped 2.49 percent to 7,400 yen. Tokyo Electron, a producer of equipment to make semiconductors, rose 1.41% to 36,560.
Some blue chip stocks suffered.
Fast Retailing, operator Uniqlo, fell 0.12% to 84,320 yen. Toyota lost 0.73% to 7,720, as did SoftBank Group, which lost 2.56% to 8,075 yen.
The airlines managed to pull themselves above the clouds, with Japan Airlines up 0.43% to 1,874 yen, while ANA Holdings added 0.21% to 2,155.5 yen.