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Tokyo: Shares end 3.2% higher after China rate cut
[TOKYO] Tokyo shares ended 3.2 per cent higher Wednesday, rebounding sharply from six days of losses after China cut interest rates in a bid to shore up confidence in the world's number two economy.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange jumped 570.13 points to 18,376.83.
The Topix index of all first section shares rose 3.23 per cent, or 46.32 points, to 1,478.97.
China's central bank reduced interest rates and slashed the amount of money banks need to hold in reserve on Tuesday - its second such double move in two months - in a bid to bolster its economy.
"The Chinese central bank has belatedly made a move," Hiroichi Nishi, a manager at SMBC Nikko Securities, told Bloomberg News.
"One of the reasons behind the steep falls so far was the fact that the Chinese authorities hadn't done anything. The fact that they have now shows that they're determined not to let the economy worsen." Tokyo's benchmark index dived nearly 4.0 per cent to close at a fresh six-month low Tuesday.
Stocks in China have fallen sharply over fears that the world's second-biggest economy, a key driver of global growth, is weaker than thought.
Shanghai shares plunged 7.6 per cent Tuesday, extending their worst four-day rout in almost two decades as investors feared the heady share prices on China's main exchange were unjustified amid the slowdown.
Wider fears about the impact of slowing growth in China on the world economy sent global stock markets into freefall on Monday.
US equity rebounded early Tuesday and stayed in the black for much of the day, but faded sharply before the close as jitters sparked by concerns over China spread.
"The market will remain under selling pressure for a while," Ronald Wan, chief executive at Partners Capital International in Hong Kong, told Bloomberg News.
Major Japanese exporters got a lift as the yen weakened against the dollar. Toyota surged 2.89 per cent to 6,920 yen, Sony jumped 4.53 per cent to 2,963 yen and banking giant Mitsubishi UFJ gained 3.39 per cent to end at 769.6 yen.
Market heavyweight Fast Retailing, operator of the Uniqlo chain, jumped 5.51 per cent to 50,620 yen.
In currency markets, the dollar rose to 119.77 yen from 118.84 yen in New York trade Tuesday.