Stocks turned moderately higher on the Tokyo Stock Exchange Monday, supported by the yen’s easing against the dollar.
The benchmark Nikkei 225 average gained 22.37 points, or 0.11 percent, to close at 20,055.80. On Friday, the key market gauge retreated 186.87 points.
The Topix, including all first-section issues, finished up 2.51 points, or 0.16 percent, at 1,614.41, after losing 12.17 points the previous trading day.
Stocks got off to a firmer start as investors took heart from the yen’s weakening against the dollar following the release in the United States on Friday of brisk economic indicators for the country, brokers said.
After meeting with some selling toward the morning close, the market gathered steam in early afternoon trading. But its upside grew heavy later amid a lack of fresh buying incentives, they said.
Stocks seemed to have reacted little to the ruling Liberal Democratic Party’s crushing defeat in the Tokyo metropolitan assembly election on Sunday.
The impact of the poll on the market was actually “limited,” said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.
Meanwhile, Yoshihiko Tabei, chief analyst at Naito Securities Co., offered the view that the negative impact of the election was “mitigated” by stronger-than-expected business sentiment among major Japanese manufacturers shown by the Bank of Japan’s latest “tankan” survey, released before the opening bell.
Both analysts, however, agreed that the ruling party’s heavy loss would create a fluid political situation and may eventually dampen investor sentiment in the future.
Players fear that, as a result of the election, Prime Minister Shinzo Abe, also LDP president, will be replaced by someone who does not know about the economy, Ota noted.
Rising issues outnumbered falling ones 1,117 to 767 in the TSE’s first section, while 138 issues were unchanged.
Volume fell to 1.601 billion shares, from Friday’s 1.968 billion shares.
Export-oriented issues, including automakers Toyota, Subaru and Honda, attracted purchases due to expectations for hefty earnings.
Auto parts maker Ashimori Industry surged on speculation that it may take over demand for Takata products.
By contrast, realtor Unizo Holdings and drug maker Daiichi Sankyo were hit by selling.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average grew 80 points to 20,070.