Wednesday, February 21

Japanese stocks rebound as US futures rise

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TOKYO — Japanese stocks traded higher on Tuesday after a rocky morning session, supported by a strong overnight Wall Street performance and positive indications from US futures markets.

The Nikkei index rose as much as 1.7% in early trade. But the index pared some gains and fell below the 27,000 psychological barrier, before rebounding to a gain of 1.59% at 27,202.70.

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The broader Topix rose 1.22%.

“There is the fact that US stocks were up yesterday (Monday), but futures have also risen sharply — for example the Dow Jones,” said Yutaka Miura, a senior equities analyst at Mizuho Securities.

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Dow Jones e-mini futures were last up 1.66%. “I think the buying has been driven in anticipation of stocks rising on Wall Street this evening,” Miura said, pointing to similarly strong performance in markets like South Korea and Hong Kong.

Online healthcare services provider M3 Inc was the best performer in the Nikkei, rising 5.17%.

Yamaha Corp was also a strong Nikkei performer, up 5.05%. Recruit Holdings Co Ltd was next, gaining 4.84% after announcing a 150 billion yen ($1.01 billion) share buyback program.

Transportation shares continued to perform well following last week’s relaxing of border restrictions for tourists. East Japan Railway Co gained 2.2%, and Topix airline stocks were up 1.54%.

Every sector on the Nikkei advanced except utilities, which fell 0.2%. Tokyo Gas Co Ltd made the biggest loss at 1.02%.

Of the index’s 225 constituents, 201 advanced, 21 fell, and three traded flat.

“I think Japanese stocks are more influenced by overseas factors than domestic,” Miura said, pointing to this week’s earnings reports from US companies like Goldman Sachs, Tesla, and Netflix.

“There’s a possibility that earnings announcements could be an important factor this week,” he said. ($1 = 148.9000 yen) (Reporting by Sam Byford; editing by Uttaresh.V)