Tokyo stocks rebound despite North Korea missile launch over Japan

Stocks turned higher on the Tokyo Stock Exchange on Friday, supported by the dollar’s resilience against the yen despite North Korea’s ballistic missile firing over Japan, with the benchmark Nikkei average hitting the highest closing level in more than one month.

The 225-issue Nikkei average rose 102.06 points, or 0.52 percent, to close at 19,909.50, its highest finish since Aug. 8. On Thursday, the key market gauge fell 58.38 points.

The Topix index of all first-section issues ended up 6.81 points, or 0.42 percent, at 1,638.94, after shedding 5.20 points the previous day.

Stocks opened lower due to selling triggered by the missile launch, carried out hours before the opening bell, brokers said. The missile traveled over Hokkaido and fell into the Pacific Ocean.

After the initial selling ran its course, however, stocks popped up into positive territory and expanded gains, with investors taking heart from the dollar’s strength against the yen after the latest provocation of North Korea, brokers said.

Market players “have become used to a North Korean missile launch,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

“Without the missile launch, the dollar could have risen above ¥111, backed by a higher-than-expected U.S. consumer price index for August,” announced on Thursday, Ota said, suggesting that Tokyo stocks could have advanced further.

The Tokyo market “tested its upside after resisting a sharp fall despite selling triggered by the missile launch,” said Akira Tanoue, senior investment strategist at Nomura Securities Co.

The market was firm although it “could have been hit by profit-taking (after the recent surge) ahead of the three-day weekend” in Japan, Tanoue added. The Tokyo market will be closed Monday for a national holiday.

“Individual investors bought small-cap issues on the back of their brisk corporate earnings reports,” Ota said.

Rising issues far outnumbered falling ones 1,363 to 563 in the TSE’s first section, while 101 issues were unchanged.

Volume jumped to 1.986 billion shares from Thursday’s 1.662 billion shares.

Optical glass maker Ohara posted a maximum allowable single-day point gain after the company revised up its consolidated operating profit forecast for the year through October from ¥900 million to ¥1.45 billion.

Astellas rose 3.59 percent after hopes grew for its new drug for prostate cancer treatment, brokers said.

Other major winners included industrial materials maker Showa Denko and industrial robot producer Fanuc.

By contrast, Tokyo Dome met with selling on its dismal earnings report and estimate, both released Thursday.

Also on the minus side were Hokuriku Electric Power and Chugoku Electric Power.

In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average rose 100 points to 19,790.

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