TOKYO: Tokyo stocks finished 1.20 percent higher on Tuesday in another volatile session with the market casting off early losses as a weakening yen helped push the market back into positive territory.
The benchmark Nikkei 225 index closed up 169.33 points to 14,311.98, while the broader Topix index of all first-section shares was 1.23 percent, or 14.20 points, higher to 1,168.27.
"Investors are buying back cyclically-sensitive stocks helped by the strengthening dollar as they were sold off in previous sessions," said Kenichi Hirano, operating officer at Tachibana Securities.
"Players are betting on a strong Wall Street performance later in the global trading day."
However, the Nikkei may slip to the 13,500 level in the coming weeks after months of rapid rises, said Yoshihiro Okumura, general manager of research at Chibagin Asset Management.
"We'll be in a correctionary phase for a month or two," he said.
"Broader sentiment is profit-taking rather than dip-buying."
Others said the Tokyo market's underlying uptrend remains intact.
"The Japanese economy has experienced a 20-year long bear market, and the problems caused by the collapse of the bubble, such as bad debt, have been resolved," Daiwa Securities said.
"Given these conditions, long-term stock market rallies may well emerge if the government and the Bank of Japan (BoJ) implement appropriate reflationary measures."
Prime Minister Shinzo Abe swept December elections on a pledge to boost the world's third-largest economy and conquer deflation with a mix of big spending and aggressive central bank monetary easing, which has helped weaken the yen.
That, in turn, makes Japan's exporters more competitive overseas and boosts the value of repatriated foreign income. Yen weakness has been a major driver of the Tokyo market's meteoric rise in recent months.
Europe's stock markets closed on a positive note on Monday while the London and New York markets were closed for holidays.
Japanese automakers outperformed the broader indices Tuesday, led by Toyota which was up 4.89 percent to 6,210 yen, while Honda gained 3.86 percent to 4,035 yen.
In Tokyo forex trading the dollar bought 102.00 yen, gaining from 101.09 yen in Europe late Monday, while the euro strengthened to 131.80 yen against 130.69 yen in Europe. (AFP)
