Nikkei rises to more than 1-week high

Japan’s Nikkei share average rose to more than one-week high on Monday, helped by a sharp rebound in oil prices which boosted markets globally.

But after the Nikkei share average posted the biggest single-day gain in more than four months on Friday, trading was choppy, which sent the benchmark index into negative territory earlier.

After recovering from the dip, the Nikkei gained 1.3 per cent to 17,173.46 points, the highest level since January 15.

Oil prices had surged 10 per cent on Friday, one of the biggest daily rallies ever, and clung on to the gains in Asia on Monday.

Meanwhile, investors are focused on the US Federal Reserve and Bank of Japan meetings this week.

The Nikkei has dropped more than 10 per cent since the beginning of the year as investors have become risk averse on the back of falling oil prices and worries about the Chinese economy.

If investors become further risk-averse and a wave of buying in a safe-haven yen hits, Japanese exporters’ earnings will likely get affected, analysts said.

“Whether the market rebounds or not relies on what the BOJ will deliver this week,’’ said Fujio Ando, senior managing director at Chibagin Securities, adding that if the central bank gives no surprises, investors may become increasingly worried about the Japanese economy.

Policy meet

While the BOJ is expected to hold steady this week at its two-day meeting on Thursday and Friday, downbeat economic reports have increased market speculation of more easing steps this year.

Japanese trade data released early on Monday showed exports skidded 8 per cent from a year earlier, a deeper drop than forecast and down for the third straight month as the slowdown in China and emerging markets took a toll.

On Monday, Japan Tobacco soared 7.7 per cent and was the fourth-most traded stock by turnover after announcing plans to raise prices on its core cigarette line-up.

Takata Corp tumbled 10 per cent after US regulators had announced on Friday a fresh recall of 5 million vehicles equipped with its potentially defective air bag inflators.

Exporters were mixed, with Toyota Motor Corp falling 0.2 per cent, Honda Motor Co shedding 0.7 per cent and Panasonic Corp rising 0.8 per cent.

The broader Topix rose 1.1 per cent to 1,389.90 and the JPX-Nikkei Index 400 gained 1.2 per cent to 12,537.71.