Japan's Nikkei trades 1% higher after sharp drop
Japan's Nikkei share average rebounded and gained 1% on Tuesday, as investors bought back stocks following the index's sharp loss in the previous session.
The Nikkei was up 1.05% to 38,504.11 by the midday break. The index ended 1.8% lower on Monday, slipping below the psychologically key 38,000 level for the first time this month.
The broader Topix was up 0.74% at 2,719.92.
«The Nikkei fell more than it should have in the previous session, so investors bought back stocks,» said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.
«But the market does see any good news to lift the index further or bad news to push it lower at the moment.»
Chip-making equipment maker Tokyo Electron rose 2.41% to provide the biggest boost to the Nikkei. Electronic parts maker TDK jumped 7.22%.
Uncertainties about the Bank of Japan's policy path weighs on investor sentiment, limiting the Nikkei's advance, strategists said.
At its policy meeting on Friday, the BOJ said it would start trimming its bond purchases and also announce a detailed plan in July on reducing its nearly $5 trillion balance sheet.
«How much the BOJ will reduce the bond buying amounts will remain unclear until the next policy meeting and the market does not like to have uncertainties,» Suzuki said.
The BOJ maintained its short-term policy rate target in a range of 0-0.1%, as expected.
«I do not think the BOJ can raise rates as early next month, as macro data won't not justify the rate hike,» said Naoki Fujiwara, senior general
