Japan’s Nikkei Recoups Losses, Ends Higher on Dividend Hunting

Reuters

17:43 JST, September 27, 2023

TOKYO, Sept 27 (Reuters) – Japan’s Nikkei share average closed higher on Wednesday, rebounding from a one-month low as investors scooped up stocks to secure rights for dividend payouts which expire after the session.

The Nikkei .N225 closed 0.18% higher at 32,371.90 after falling to 31,960.32, its lowest level since Aug. 28.

The broader Topix .TOPX rose 0.32% to 2,379.53.

“The market tracked Wall Street’s declines earlier in the session but investors bought shares to get rights for dividend payouts, which pushed the market higher,” said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.

Investors needed to buy stocks by the end of the current session to get dividend payout rights for companies that count September as the end of their half-year.

In recent sessions, investors bought so-called value shares, which pay higher dividends as their growth is slow.

The Topix value share index .TOPXV has gained 5.4% so far this month, outperforming a 1.62% fall in the Topix growth share index .TOPXG.

“Overall Japanese stocks are buy because of the Bank of Japan’s ultra-low rate policy. Also the government is putting together a stimulus package to stir the economy.”

Wall Street’s main indexes fell more than 1% overnight as 10-year Treasury yields held on to multi-year highs, with investors still wrestling with prospects of higher-for-longer interest rates the economic fallout. .N

U.S. Treasury yields eased during the Asian trading, while the 10-year Japanese government bond yield JP10YTN=JBTCwas flat, easing investor sentiment. US/

Chip-testing equipment maker Advantest 6857.T gave up early losses to end 1.74% higher, becoming the biggest boost to the Nikkei.

Drugmakers Chugai Pharmaceutical 4519.T and Daiichi Sankyo 4568.T rose 4.07% and 3.52%, respectively.

The drug sector .IPHAM.T rose 1.72% to become the best performer among the 33 industry sub-indexes on the Tokyo Stock Exchange.

Uniqlo-brand owner Fast Retailing 9983.T fell 1.52% to weigh on the Nikkei the most.