The Nikkei 225 average bounced back slightly Wednesday, underpinned by buying on dips and buybacks after the recent tumble.
The key market gauge climbed 2.14 points to end at 16,885.33 a day after tumbling 525.52 points.
But the Topix closed 1.34 points lower at 1,359.80 after falling 39.95 points Tuesday.
The Nikkei snapped a four-session losing streak, while the Topix fell for the fifth straight session.
The TSE opened lower on the heels of overnight falls in U.S. and major European equities, reflecting slumping crude oil prices and concern over Greek political turmoil.
After the initial selling ran its course, however, the Nikkei popped up into positive territory and showed small ups and downs around the previous day’s closing level for the rest of the morning, with its downside propped up by buying on dips on the back of the yen’s easing.
The key indexes moved on the plus side for most of afternoon trading, helped by solid performances of other Asian equities, but their upside was limited as buying concentrated on some large-cap issues, including automaker Toyota, mobile carrier SoftBank and electronics giant Sony, brokers said.
The recent slump indicates that “investor expectations for the market this year are weak,” said Kenichi Hirano, market analyst at K Asset Co.
“Lower crude oil prices are positive for Japan and the country is not heavily involved in European political issues. There is no reason for Tokyo stocks to fall sharply,” Hirano said. “But investors cannot step up purchases when the Dow is in a correction phase.”
Risk-averse sentiment is expected to continue until the Greek general election on Jan. 25, brokers said.
Still, the Nikkei rose to nearly 17,000 on Wednesday, supported by buybacks from investors who believe stocks have been oversold in the short term, an official at a major securities firm said.
“Selected issues, such as general contractors, realtors and machinery makers, will likely continue to attract buying and underpin the market’s downside,” Hirano said.
Falling issues outnumbered rising ones 1,003 to 690 in the first section, while 166 issues were unchanged.
Volume decreased to 2.209 billion shares from Tuesday’s 2.688 billion shares.
Sony surged 4.63 percent after media reports that its U.S. film unit, Sony Pictures Entertainment Inc., has taken in more than $ 31 million in revenue from its online and on-demand distribution of “The Interview,” a comedy about a fictional assassination attempt on North Korean leader Kim Jong Un.
Also on the plus side were automakers Toyota and Mazda and mobile carriers SoftBank and KDDI.
By contract, McDonald’s Holdings fell for the sixth straight session on the Jasdaq market for startups following media reports that foreign substances have been detected in its food products.
Europe-related issues came under heavy selling pressure on growing concern over economic slowdowns in the region, brokers said. Major losers included camera-makers Canon and Nikon.
Resource-related names were battered amid wariness over drops in their earnings following tumbling crude oil prices. Among them were trading house Mitsubishi, oil companies JX Holdings and Inpex.
In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average climbed 60 points to end at 16,960.