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Nikkei index rebounds in early trade

Nikkei index rebounds in early trade

Japan's key stock index rebounded in early trade Monday as investors bought back export-linked shares on the yen's retreat from a 13-year high.
The benchmark Nikkei 225 stock average rose 200.95 points, or 2.63 percent, to 7,850.03 as of 10:15 a.m. (0115 GMT) Monday, rebounding from earlier losses.
"We are seeing modest buyback of export-linked stocks as the yen was falling to the 94-yen level against the dollar," said Kazuhiro Takahashi, equity strategist at Daiwa Securities SMBC Co. Ltd.
"There is speculation that the Bank of Japan may intervene in the market to pressure the yen against the dollar," Takahashi said.
Earlier, the Nikkei index opened lower despite a report that the government was considering massive capital injection into struggling banks in a bid to calm jittery financial markets.
"The reported plan by the government hardly cheered investors. What the market really wants is a package of stimulus measures to boost the Japanese economy," said Kazuki Miyazawa, market analyst at Daiwa Securities SMBC Co. Ltd.
Citing unidentified sources, the Yomiuri newspaper said Monday the government is considering injecting public money worth 10 trillion yen ($108 billion) into struggling banks in a bid to stabilize the financial market hit by sagging stocks and a soaring yen.
The paper said the government could announce the injection measure as early as Monday.
Miyazawa said sentiment remained downbeat with export-linked stocks under pressure amid a stronger yen.
A strong yen hurts Japanese exporters by eroding their overseas earnings when converted back to yen.
The yen stood at 94.29 to the dollar in Tokyo late morning trade Monday, compared with 94.24 yen in New York late Friday. The Japanese currency hit the 90-yen level against the dollar Friday, the highest since August 1995.


Updated : 2021-04-18 17:37 GMT+08:00