Stocks shrugged off their early weakness to end higher on the Tokyo Stock Exchange Wednesday, amid receding concerns over heightened geopolitical risks in the wake of North Korea’s ballistic missile launch.
The benchmark Nikkei 225 average rose 49.28 points, or 0.25 percent, to end at 20,081.63. On Tuesday, the key market gauge fell 23.45 points.
The Topix, including all first-section issues, finished 8.93 points, or 0.55 percent, higher at 1,618.63, after falling 4.71 points the previous day.
Selling outpaced buying from the outset of the day’s trading amid a dearth of fresh buying incentives, and the market took a dive in midmorning trading to push the Nikkei average sufficiently below the 20,000 line.
Investor sentiment deteriorated after a South Korean official reportedly said Pyongyang would likely conduct a nuclear test, among other provocations, according to brokers. The dollar’s fall below ¥113 also damped risk appetite among players.
But both Nikkei and Topix began going up in the early afternoon as the yen’s appreciation was halted and bargain-hunting activities gained ground, brokers said.
Investors increasingly took heart from calm South Korean share price moves and decided to refrain from taking only the sell side until they see a U.S. response to the missile launch, a major brokerage firm official said.
“Cyclical buying in big names, including automakers and semiconductor-related companies, seemed to have supported the market,” said Masayuki Otani, chief market analyst at Securities Japan Inc.
He added that the Nikkei average’s topping of its 25-day moving average might also be behind the market’s resilience.
Meanwhile, Tsuyoshi Horota, analyst at SMBC Nikko Securities Inc., warned that if North Korea actually carries out a nuclear test, the Nikkei could tumble by some 1,000 points.
Rising issues outnumbered falling ones 1,329 to 550 in the TSE’s first section, while 143 issues were unchanged.
Volume fell to 1.794 billion shares, from Monday’s 1.857 billion shares.
Subaru and Toyota as well as Tokyo Electron attracted purchases.
Mizuho and Sumitomo Mitsui were buoyant.
Retailer Ryohin Keikaku was upbeat on expectations for hefty earnings to be released soon.
By contrast, mobile phone carrier SoftBank Group and game maker Nintendo were hit by selling.
In index futures trading on the Osaka Exchange, the key September contract on the Nikkei average grew 60 points to 20,070.