TOKYO: Japan’s Nikkei share average reversed course to end higher on Monday as investors took a fresh view on strong domestic corporate earnings, while drugmaker Astellas surged on the US approval of Izervay.

The Nikkei edged up 0.19% to close at 32,254.56, after opening lower, tracking Wall Street’s declines at the end of last week. The index fell as much as 0.9% to hit its lowest since July 12 earlier in the session.

The broader Topix also cut its early losses to end 0.41% higher at 2,283.93.

“The market tracked declines in the US markets at the end of last week, while investors were not making active bets on stocks as they were not certain about where the Japanese government bond (JGB) yields should stand,” said Shuji Hosoi, senior strategist at Daiwa Securities.

But investor sentiment was supported by improvement in Japanese firms’ earnings per share, said Hosoi. “Companies, such as automakers, have raised their outlook,” he said.

Wall Street closed lower on Friday, after a report of slowing US labor market growth, and all three major indexes posted weekly losses as investors braced for more potential downside surprises a day after disappointing earnings from Apple.

Tokyo stocks tumble for second straight day

In Japan, investors have been searching for the fair value of the benchmark 10-year government bonds, after the Bank of Japan surprised the market to set a de-facto ceiling of the bond yield at 1% last month.

Meanwhile, Astellas Pharma surged 10.05% to become the biggest support for the Nikkei, after the US Food and Drug Administration approved the drugmaker’s Izervay for the treatment of age-related macular degeneration (AMD).

Its peer Daiichi Sankyo rose 1.95%. Phone company KDDI rose 1.06% and medical equipment maker Terumo gained 1.28%.

Heavyweight technology stocks weighed on the Nikkei, with chip-related Tokyo Electron and Advantest falling 1.04% and 1.64%, respectively.