Japan’s Nikkei reverses course, ends higher as autos rise

TOKYO – Japan’s Nikkei share average reversed early losses to end higher on Wednesday, driven by gains in the auto sector although trade was dominated by retail investors, who bought back cheap stocks in muted trade with many global markets closed for the holidays.

The Nikkei rose 0.24% to close at 39,130.43 after falling as much as 0.28% earlier in the session.

The auto sector rose 2.9% and was the best performer among the Tokyo Stock Exchange’s 33 industry sub-indexes. Nissan Motor, the Nikkei’s top percentage gainer, surged 8.66%.

The broader Topix also erased losses to end 0.24% higher, at 2,733.86. Toyota Motor, which closed up 4.57%, was the biggest contributor to the Topix rise.

“There was seasonal selling of shares by retail investors, such as stocks in investment trusts. But once the equities fell to a certain level, they bought them back, betting the market will rise in the next session,” said Naoki Fujiwara, senior general manager at Shinkin Asset Management.

Technology investor SoftBank Group rose 1.27% and was the biggest source of support for the Nikkei. Uniqlo brand owner Fast Retailing rose 0.26%.

The market struggled to find direction with foreign investors away for the holiday season, said Fumio Matsumoto, chief strategist at Okasan Securities.

“This time of the year, local individuals were the only ones active in trading but they do not want to place active bets when foreign investors are away and large stocks do not move actively.”

Bank shares fell, with Mitsubishi UFJ Financial Group falling 0.44% and Sumitomo Mitsui Financial Group down 0.56%.

Of more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 52% rose, 44% fell and 3% traded flat.

(Reporting by Junko Fujita; Editing by William Mallard and Edmund Klamann)