Tokyo stocks rose sharply Tuesday, with the Nikkei index briefly jumping over 400 points, as concerns over the health of the global economy eased on stronger-than-expected U.S. and Chinese economic data.
The 225-issue Nikkei Stock Average ended up 293.10 points, or 1.33 percent, from Monday at 22,288.14. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 9.55 points, or 0.62 percent, higher at 1,558.77.
Gainers were led by iron and steel, air transportation and real estate issues.
Investors' risk appetite also improved in the currency market with the U.S. dollar rising to the upper 107 yen range from mid-107 yen in the early morning.
At 5 p.m., the dollar fetched 107.72-73 yen compared with 107.53-63 yen in New York and 107.19-20 yen in Tokyo at 5 p.m. Monday.
The euro was quoted at $1.1222-1223 and 120.89-93 yen against $1.1237-1247 and 120.89-99 yen in New York and $1.1243-1244 and 120.52-56 yen in Tokyo late Monday afternoon.
Improved sentiment prompted investors to move away from the relative safety of Japanese government bonds. The yield on the benchmark 10-year debt closed at 0.025 percent, up 0.020 percentage point from Friday's close. The debt was untraded Monday for the first time since November 2018.
Shares were higher from the opening, tracking an overnight rebound on Wall Street on upbeat U.S. housing data for May, and got a further boost from a stronger-than-expected reading from the official Chinese purchasing managers' index that showed factory activity expanded in June.
But gains were trimmed toward the end of Tokyo trading with some investors cautiously watching developments related to China's passage of a Hong Kong security law, brokers said.
Yutaka Miura, senior technical analyst at Mizuho Securities Co., said investors were relieved as positive data from the world's two largest economies indicated hopeful signs for the global economy.
"But they are cautiously watching the U.S. reaction to China's passage of the Hong Kong security law, with the focus on any U.S. step to revoke Hong Kong's special trade status," Miura added.
China on Tuesday enacted a national security law to crack down on what Beijing views as subversive activity in the Chinese city and former British colony, which had limited impact so far on Asian stock markets, brokers said.
Due to its special status, Hong Kong has been exempted from tariffs that the United States has imposed on China in the two countries' trade conflict.
On the First Section, advancing issues outnumbered decliners 1,093 to 991, while 85 ended unchanged.
Marine transportation and steelmakers were among gainers amid hopes of a global economic recovery.
Nippon Yusen rose 23 yen, or 1.5 percent, to 1,516 yen. Kobe Steel climbed 7 yen, or 1.9 percent, to 370 yen, and JFE Holdings jumped 24 yen, or 3.2 percent, to 772 yen.
Trading volume on the main section fell to 1,240.84 million shares from Monday's 1,249.62 million shares.© KYODO