Tokyo stocks rose 0.99 percent Thursday, rallying on bargain-hunting and as Beijing pledged it would not let the yuan plummet after a series of cuts that have roiled financial markets. The Nikkei 225 index at the Tokyo Stock Exchange rose 202.78 points to close at 20,595.55, while the Topix index of all first-section shares edged up 0.13 percent, or 2.20 points, to 1,667.95.
China on Thursday devalued its currency for the third straight day, trimming the reference rate for the yuan - also known as the renminbi (RMB) - by 1.11 percent to 6.4010 yuan for $1, from the previous day's 6.3306. The cut was less than previous two days and came after reports the People's Bank of China (PBoC) intervened Wednesday to stem the yuan's fall.
After global stock and currency markets staggered in response, the PBoC went on the offensive Thursday, telling reporters that the yuan was still a strong unit and that Beijing would keep it stable. "Currently, there is no basis for the renminbi exchange rate to continue to depreciate," assistant bank governor Zhang Xiaohui told a briefing, according to a transcript. However, the devaluations have aggravated concerns about the strength of the world's number two economy and fears of a currency war as other countries feel pressure to devalue to compete.
Tokyo shares opened flat but picked up in the afternoon on a weaker yen and as investors looked for bargains following Wednesday's decline, said Daisuke Uno, chief market strategist of Sumitomo Mitsui Banking. "The morning session was a bit directionless as there was the yuan cut again and there were fewer market players" due to Japan's Obon holiday, he said. "But investors bought back shares in the afternoon as prices looked good."
At the close, market heavyweight Fast Retailing, operator of the Uniqlo clothing chain, bounced back 2.79 percent to end at 55,510 yen, while Nissan, which depends heavily on China for sales, was flat at 1,169 yen. Rival Honda added 0.23 percent to 4,308 yen, Toyota fell 0.58 percent to 7,941 yen, and factory robotics giant Fanuc rose 0.71 percent to 21,140 yen.
Mobile carrier SoftBank slumped 2.56 percent to 7,491 yen after Chinese e-commerce giant Alibaba fell in US trading as a weaker economy weighed on earnings. SoftBank holds a major stake in Alibaba. On currency markets, the dollar fetched 124.47 yen, up from 124.24 yen in New York.
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