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Tokyo: Stocks close higher after Christmas selloff

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[TOKYO] Tokyo stocks closed higher on Wednesday, rebounding from the previous day's 5 per cent drop as the yen's rise took a breather.

The benchmark Nikkei 225 index, which on Tuesday closed at a 20-month low on worries over the US economy, gained 0.89 per cent, or 171.32 points, to 19,327.06 to log its first positive finish in six sessions.

The broader Topix index rose 1.12 per cent, or 15.92 points, to 1,431.47.

Despite the recent market rout, there has been no clear sign of a recession in the US economy, said Norio Miyagawa, senior economist at Mizuho Securities.

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"Our judgement is that the US economy remains solid at the moment" though investors need to pay attention to the possible impact of US trade rows with other countries on financial markets and business outlooks, he said in a report.

"As financial markets regain their calm, we expect US stocks and the dollar will track higher," he said.

Share prices in Wednesday's rebound failed to recoup all the ground lost the previous day as investors grew cautious before Wall Street reopens after a bruising session before Christmas.

"The future direction of Japanese stocks will depend on whether New York will rebound or sink further," Masayuki Kubota, chief strategist at Rakuten Securities, told AFP.

Heavy selling hit the Tokyo market on Christmas Day following selloffs on Wall Street. The yen drew safe-haven buying, weighing on sentiment.

On Wednesday, the yen's appreciation came to a lull, helping boost exporter shares.

Toyota rose 1.10 per cent to 6,146 yen and Nintendo climbed 1.24 per cent to 28,115 yen.

The dollar was changing hands at 110.45 yen, up from 110.01 yen late on Tuesday, but still down from the 111-yen range seen last week.

AFP