Tokyo stocks extend rally, close almost 2% higher
Tokyo shares picked up pace after China's Purchasing Managers' Index of manufacturing activity.
TOKYO (AFP) - Tokyo stocks rallied again Thursday after a slight improvement in Chinese factory activity and a rise on Wall Street, as investors shrugged off a weak Japanese business confidence survey.
The rebound came after a 4.0 percent plunge Tuesday driven by worries about China s economy and concerns over a US Federal Reserve plan to raise near-zero interest rates in 2015.
On Thursday, the benchmark Nikkei 225 index at the Tokyo Stock Exchange gained 1.92 percent, or 334.27 points, to end at 17,722.42, while the broader Topix index of all first-section shares was up 2.24 percent, or 31.58 points, to 1,442.74.
"There has been a growing feeling in the markets that while the global outlook has dimmed somewhat, the current virulence of the selloff was somewhat overdone," Angus Nicholson, a market analyst at IG in Melbourne, said in a commentary.
Tokyo shares picked up pace after China s Purchasing Managers Index of manufacturing activity for September came in a little better than the previous month, though it was still near a three-year low.
"The Nikkei reacted well to the Chinese PMI news," Nicholson said.
On the home front, however, a much-anticipated Bank of Japan report showed sagging confidence among Japanese firms last quarter as a recession looms in the world s number three economy.
The disappointing Tankan survey supplied the latest evidence that Prime Minister Shinzo Abe s growth blitz, dubbed Abenomics, was faltering, as speculation grows that Japan s central bank would have to expand its massive asset-buying scheme, possibly as early as this month.
"While today s Tankan was not as bad as most had feared, it nonetheless corroborates other signs that Japan s economic recovery has ground to a halt," Marcel Thieliant from Capital Economics said in a commentary.
In share trading, Japan Tobacco fell 3.30 percent to 3,573 yen, after losing almost seven percent Wednesday, as investors dismissed its $5.0 billion purchase of a US-cigarette brand as too pricey.
More than $10 billion has been wiped off the tobacco giant s market value in response to JT s agreement with Reynolds American to buy its Natural American Spirit brand outside the US, Bloomberg News reported, as some analysts cut their outlook on the stock.
Toyota shares were up 2.58 percent to 7,151 yen, Sony gained 3.36 percent to 2,996, and market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, rose 1.87 percent to 49,300 yen.
On currency markets, the dollar rose to 120.17 yen from 119.86 yen Wednesday in New York.
