TOKYO – The Nikkei share average rose 2.31 percent, its biggest one-day percentage gain in three months, on Thursday as investors returned to Toyota Motor Corp. (TM) and other top firms after sharp falls and an unprecendented early market closure the previous day.
Hoya Corp. and Fujitsu Ltd. advanced following upgrades from brokerage firms, while Softbank Corp. surged after a steep two-day drop.
"Blue-chip companies have nothing to do with the Livedoor investigation, and investors are picking them up on dips. It's a kind of flight to quality," said Takahiko Murai, general manager of equities at Nozomi Securities
He was referring to an investigation into Internet portal operator Livedoor Co. on suspicions of spreading false information to investors, which had been the spark for three days of sharp declines in Tokyo shares.
The Nikkei gained 355.10 points to 15,696.28, its biggest one-day percentage gain since October 2005. It had fallen for the last three sessions, tumbling nearly 7 percent and wiping out more than $300 billion in shareholder value.
The broader TOPIX index rose 2.90 percent to 1,620.29.
Naoyuki Torii, general manager and strategist Fukoku Capital Management Inc., said the market has fallen to an attractive level, although it may remain in range for a while as the quarterly earnings reporting season for major Japanese companies starts.
"I think investors will pick up stocks with good earnings prospects," he said.
Torii also said he would keep an eye on oil prices, which have been rising on growing concerns about Iran's standoff with the West over its nuclear programme.
"We have to be careful not to put too much focus on domestic matters as there are troubling issues going on around the world" which could affect the stock market, he said.
Toyota Motor, the world's second largest auto maker, gained 2.3 percent to 5,910 yen. It had fallen 3.2 percent since Monday.
Trade activity fell from the previous session, with 2.46 billion shares changing hands on the Tokyo exchange's first section, but that was still well above last year's daily average of 2.07 billion shares.