Nikkei bounces back on Wall Street surge

Stocks bounced back on Friday thanks to Wall Street’s surge overnight, but the Tokyo market’s upside was heavy amid a wait-and-see mood before the release of U.S. jobs data for January.

The Nikkei 225 average climbed 143.88 points, or 0.82 percent, to end at 17,648.50. On Thursday, the key market gauge fell 174.12 points.

The Topix gained 7.08 points, or 0.50 percent, to close at 1,417.19 after falling 6.89 points the previous day.

Tokyo stocks were upbeat from the outset of Friday’s trading after the U.S. Dow Jones industrial average extended its winning streak to a fourth session to end at its highest in about a month on Thursday. The Dow’s jump came as key crude oil futures on the New York Mercantile Exchange rose back above $ 50 per barrel on a closing basis.

The Nikkei briefly gained nearly 200 points in early trading, with a wide range of issues attracting purchases, brokers said.

After the initial buying ran its course, however, the market’s upside became heavy as investors refrained from active trading ahead of the weekend, they said.

Market players increasingly retreated to the sidelines before the release of January jobs data by the U.S. Commerce Department on Friday, they added.

The rebound in crude oil prices heartened investors and helped shore up resources-related issues, including oil developers and trading houses, they said.

Still, players did not step up purchases, as they cautiously waited for the U.S. jobs data after a recent spate of sluggish indicators in the world’s biggest economy, analysts said.

Many market players expect the January data to show a month-on-month increase of about 230,000 in nonfarm payrolls.

“If the U.S. jobs data turn out to be far worse than market expectations, both New York and Tokyo stocks will be sold aggressively,” said Tomoaki Fujii, head of the corporate research division at Takagi Securities Co. But Fujii said nonfarm payroll growth will likely come very close to the consensus estimate of 230,000.

An official at a major brokerage house said the Tokyo market will likely be influenced by overseas news for the time being as there could be few major market-moving factors seen on the domestic front.

An official at a bank-affiliated securities firm said the market is expected to move in a narrow range for some time.

Rising issues outnumbered falling ones 1,020 to 704 on the TSE’s first section, while 138 issues were unchanged.

Volume fell to 2.212 billion shares from Thursday’s 2.645 billion shares.

Resona Holdings jumped 2.93 percent thanks to media reports that the major banking group is considering forming a capital and business alliance with Nippon Life Insurance Co., brokers said.

Traders Mitsui, Marubeni and Sojitz, and oil companies JX Holdings and Cosmo Oil were buoyant on the back of higher crude oil prices.

Also on the sunny side were electronics makers Sony and Panasonic, drugmakers Astellas and Eisai, and utilities Chubu Electric and Kansai Electric.

On the other hand, McDonald’s Holdings lost ground after the hamburger chain operator said Thursday it incurred the first group net loss in 11 years in the business year through last December due to a slump in sales after a Chinese supplier was found using out-of-date chicken.

Also out of favor were automakers Toyota and Suzuki as well as Japan Tobacco and camera maker Nikon.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average was up 180 points at 17,660.

Nikkei Futures

nikkeifutures.org@imediaone.com

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