A woman walks by an electronic stock board of a securities firm in Tokyo, on Aug. 23, 2021. (AP Photo/Koji Sasahara)
TOKYO (Kyodo) -- Tokyo stocks ended higher Monday on dip-buying after the Nikkei's lowest finish for this year late last week and growing speculation that the defeat of a close ally of Prime Minister Yoshihide Suga in a high-profile local election may prompt his government to draw up measures, such as an additional stimulus package, in the hope of propping up his falling popularity.
The 225-issue Nikkei Stock Average ended up 480.99 points, or 1.78 percent, from Friday at 27,494.24. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 34.46 points, or 1.83 percent, higher at 1,915.14.
Gainers were led by marine transportation, transportation equipment and electric appliance issues.
The U.S. dollar briefly edged up near the 110 yen line, as it was bought on expectations of a wider interest rate gap between the United States and Japan after a rise in U.S. Treasury yields late last week, dealers said.
At 5 p.m., the dollar fetched 109.90-91 yen compared with 109.73-83 yen in New York and 109.61-63 yen in Tokyo at 5 p.m. Friday.
The euro was quoted at $1.1722-1723 and 128.83-87 yen against $1.1695-1705 and 128.42-52 yen in New York and $1.1680-1681 and 128.03-07 yen in Tokyo late Friday afternoon.
The yield on the benchmark 10-year Japanese government bond rose 0.010 percentage point from Friday's close to 0.015 percent as the safe-haven debt was sold after sharp gains in the stock market whet investors' risk appetite, dealers said.
Stocks rebounded as investors scooped up battered shares after the Nikkei benchmark fell about 2 percent in the two days through Friday to its lowest level since Dec. 28, 2020.
Dip-buying kicked in as recent falls triggered by Toyota Motor Corp.'s announcement that it was cutting global output by some 40 percent next month compared with its initial plan was deemed overdone, brokers said.
Also contributing to stocks' gains was the loss of Hachiro Okonogi, who received support from Suga and some other members of his ruling Liberal Democratic Party in the Yokohama mayoral election on Sunday, they said.
The election outcome, seen as a gauge for Suga's popularity, fueled speculation that his Cabinet may come up with an additional economic measure against the coronavirus pandemic fallout in a bid to shore up his approval ratings and win the House of Representatives election due in the fall, the brokers said.
"Investors are expecting a stimulus package, and that is likely to lift stocks," Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co., said, adding he does not see any adverse impact on the LDP's election performance even if Suga is replaced.
"More than unpopular Mr. Suga, the element of freshness (in a new LDP head replacing Suga) is likely to serve as a positive factor" to the lower house election, Fujito said.
The Nikkei is expected to remain sluggish, moving between the 27,000 and 28,000 line in the short term due to the highly contagious Delta coronavirus variant, he said.
But toward the end of fiscal 2021, the index is likely to climb, according to Fujito, citing how many major companies revised upward their earnings outlook for the current business year ending in March 2022.
On the First Section, advancing issues outnumbered decliners 1,939 to 201, while 50 ended unchanged.
Toyota Motor gained 307 yen, or 3.4 percent, to 9,222 yen, rising for the first time in six sessions.
Shipping firms, which met heavy selling last week, were bought, with Nippon Yusen jumping 330 yen, or 4.5 percent, to 7,620 yen, Mitsui O.S.K. Lines climbing 350 yen, or 5.4 percent, to 6,810 yen and Kawasaki Kisen surging 285 yen, or 6.3 percent, to 4,795 yen.
Trading volume on the main section declined to 944.16 million shares from Friday's 1,231.97 million shares.
Font Size S M L Print Timeline 0