Japanese stocks turned higher and hit 1-1/2-week highs in Wednesday’s afternoon trade, bouncing from morning losses helped by investors buying Nikkei futures and on expectations the Bank of Japan would buy equities, traders said.

The Nikkei 225 rose 0.5 per cent to 19,721.35 in early afternoon, after trading in negative territory earlier. It rose to a peak of 19,753.34, the highest intraday level since April 30.

“Foreign hedge funds are seen buying Nikkei futures as the Nikkei is thought to be cheap,’’ said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Other traders said that even as the benchmark index is within touching a distance of its 25-day moving average of 19,758.25, the Nikkei is seen as cheap given the Topix has already gone above the same technical level.

Added to this are hopes that the BoJ will counter market weakness by continuing to buy exchange traded funds (ETFs) as part of its massive monetary easing programme.

On Tuesday, the central bank had bought 36.1 billion yen of ETFs, which was announced after the market close. The broader Topix was flat at 1,602.68 and the JPX-Nikkei Index 400 rose 0.1 per cent to 14,484.53.

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