Stocks gained further ground in Tokyo on Thursday due to brisk purchases triggered by healthy Chinese economic indicators.
The Nikkei climbed 334.27 points, or 1.92 percent, to end at 17,722.42. On Wednesday, it jumped 457.31 points.
The Topix gained 31.58 points, or 2.24 percent, to 1,442.74, after rising 35.64 points the previous day.
Buying outnumbered selling from the outset of Thursday’s trading in the wake of higher U.S. and major European equities overnight.
After moving narrowly, the Nikkei average extended gains and recovered the 17,500-mark thanks to index futures-led purchases.
The buying was spurred by better-than-expected Chinese manufacturing industry purchasing managers’ index for September and an upward revision to the Caixin China manufacturing PMI for the same month, both released Thursday morning, brokers said.
Meanwhile, the Bank of Japan’s tankan quarterly business sentiment survey for September, released just before the opening bell, had little impact on the market, although the headline diffusion index gauging business sentiment among large manufacturers deteriorated for the first time in three quarters.
The indexes accelerated their upswing in the afternoon and maintained their strength toward the close as buying of undervalued issues gathered pace on the back of solid performances of other Asian stock markets, brokers said.
The Nikkei briefly jumped some 440 points, supported also by the yen’s drop against the dollar, brokers said.
Investors were relieved to find that “no negative incentives came out of China” as the Chinese market is closed for seven straight days from Thursday including national holidays, said Hideyuki Suzuki, head of investment market research department at SBI Securities Co.
Investors were hoping for positive news related to Chinese tourists to Japan during the holidays, such as a shopping spree, Suzuki said.
As for the BOJ’s “tankan” survey, analysts said it failed to boost investor hopes for additional monetary easing by the central bank as the DI for large nonmanufacturers’ current business conditions turned out surprisingly strong.
Rising issues far outnumbered falling ones 1,446 to 378 in the TSE’s first section, while 71 issues were unchanged.
Volume decreased to 2,314 million shares from Wednesday’s 2,583 million shares.
Financial and real estate issues were buoyant on hopes for additional BOJ easing, following news that former BOJ Deputy Governor Kazumasa Iwata has suggested that the Japanese economy and prices are moving in a direction that is expected to force the BOJ to do something, brokers said.
Major gainers included megabank group Mitsubishi UFJ, brokerage firm Nomura and realtors Mitsubishi Estate and Sumitomo Realty.
Automakers Toyota, Nissan and Honda were also upbeat, along with clothing retailer Fast Retailing and mobile carriers KDDI and Softbank Group.
On the other hand, domestic demand-oriented issues met with selling to cash in gains. They include food producer Meiji Holdings, meat processor Yonekyu and drug maker Daiichi Sankyo.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average climbed 360 points to end at 17,690.
