TOKYO: Tokyo stocks ended 1.00 percent higher Tuesday after a late buying surge, while the dollar rebounded moderately against the yen.
The benchmark Nikkei 225 index added 143.02 points to 14,401.06, after falling 1.36 percent in morning trade, while the Topix index of all first-section shares gained 0.75 percent, or 8.92 points, to 1,193.66.
Sony shares fell 4.58 percent to 2,039 yen after the electronics giant said its board had unanimously decided to reject a US hedge fund's proposal to spin off part of its profitable entertainment arm.
Yoshihiro Okumura, general manager at Chibagin Asset Management, said the stock market was "primarily driven by currency movements, with individual shares often subject to earnings- and other event-driven effects".
"In thinly traded markets typical of mid-summer like now, index movements can be more vulnerable than usual to single-factor trading patterns, such as reflexive weak-yen based-stock buying," he told Dow Jones Newswires.
The dollar-yen pairing has moved in virtual lockstep with the Tokyo stock market, something of a chicken and egg relationship where analysts struggle to agree on which is causing the other to move.
The dollar, which fell below 98 yen earlier in the day, rebounded to 98.45 yen in afternoon Tokyo trade Tuesday compared with 98.27 yen in New York on Monday afternoon.
A weak yen is advantageous for Japanese exporters as it makes their products more competitive abroad while inflating their foreign income when repatriated.
US stocks ended mostly lower Monday on fairly quiet trading during which some investors fretted about the possible pullback of the Federal Reserve's aggressive bond-buying programme.
The Dow Jones Industrial Average was down 0.30 percent at 15,612.13.
The US growth outlook appeared firmer as the Institute for Supply Management's July purchasing managers index for the services sector showed a healthy jump in activity.
This raised some concerns that the Fed might taper its bond-buying programme sooner rather than later, weighing on stocks while supporting the dollar.
In Tokyo trade, Toyota rose 0.31 percent to 6,380 yen, while Sharp gained 0.47 percent to 423 yen and Panasonic rose 1.89 percent to 914 yen. (AFP)
