Japan’s Nikkei regains ground on bargain hunting, Fed caution weighs

TOKYO, Jan 24 (Reuters) – Japan’s Nikkei index reversed course to close higher on Monday, as investors scooped up cheap stocks after U.S. equity futures rose, although gains were capped by caution ahead of the U.S. Federal Reserve’s policy meeting this week.

The Nikkei (.N225) edged up 0.24% to 27,588.37. Earlier in the day, it fell 1.2% after the S&P 500 and Nasdaq posted their biggest weekly drop since March 2020 last week. The broader Topix (.TOPX) inched up 0.14% to 1,929.87.

In a sign that the U.S. sell-off may have been overdone, Nasdaq futures gained more than 0.8% during Asian trading hours.

“There was demand as long as stocks were cheap because the economic outlook remains positive,” said Jun Morita, general manager of the research department at Chibagin Asset Management. “Also the gains in U.S. futures supported investor sentiment.”

Chip-making equipment maker Tokyo Electron (8035.T) and Uniqlo clothing store owner Fast Retailing (9983.T) led the Nikkei’s gains, rising 1.62% and 1.17%, respectively.

Camera maker Canon (7751.T) rose 2.02% after a report that its annual net profit would jump 20%. Peer Nikon (7731.T) rose 2.8%.

Oil explorers gained amid rising oil prices, with Inpex (1605.T) jumping 4.57%.

Shipping companies also rallied, with Kawasaki Kisen (9107.T) gaining 6.24% to become the top gainer on the Nikkei.

There were 148 advancers on the Nikkei index against 74 decliners

The volume of shares traded on the exchange’s main board (.TOPX) was 1.08 billion, compared with the average of 1.09 billion in the past 30 days.

Reporting by Junko Fujita; Editing by Subhranshu Sahu

Our Standards: The Thomson Reuters Trust Principles.