Japan’s Nikkei Stock Average Rebounds from Sharp Loss on Wall Street’s Rally, Weaker Yen (UPDATE 1)

Reuters

12:29 JST, March 3, 2025 (updated at 16:30 JST)

TOKYO, March 3 (Reuters) – Japan’s Nikkei share average ended more than 1% higher on Monday, rebounding from a five-month low in the previous session, underpinned by Wall Street’s strong finish last week and a weaker yen.

The Nikkei jumped 1.7% to 37,785.47 and the broader Topix climbed 1.77% to 2,729.56.

“The Nikkei fell to a level that prompted investors to scoop up stocks,” said Kiyohide Nagata, chief strategist at Tokai Tokyo Intelligence Laboratory.

“The Nikkei could have continued falling today but it didn’t despite weak demand from foreign investors. That is because there was a demand for corporate share buybacks.”

Japanese firms are buying back their shares at a record level to boost returns for their shareholders. Recruit jumped 6.93% after the staffing agency said it would buy back as much as 3.5% of its outstanding shares.

Japanese stocks saw the largest foreign outflow in nearly five months in the latest week, hit by a stronger yen, rising inflationary concerns, and uncertainties over U.S. tariff policies. The index lost 6% in February in its biggest monthly loss in more than two years.

The yen fell to as low as 151 yen to the dollar on Monday, after hitting an over 2-1/2 month high last week. A weaker local currency tends to boost exporters’ shares, as it increases the value of overseas profits in yen terms when firms repatriate them to Japan.

Uniqlo-brand owner Fast Retailing rose 3.3% to become the biggest boost for the Nikkei.

Toyota Motor jumped 3.94% to become the biggest support for the Topix.

Seven & i Holdings rose 2.38% after a report that the retail giant is finalizing a plan for its president to step down and be replaced by its first foreign chief.

All of the Tokyo Stock Exchange’s 33 industry sub-indexes rose, with the services sector rising 3.26% to become the top performer.