Tokyo stocks cast off earlier losses to finish 0.42 percent higher on Thursday as investor sentiment got a boost from upbeat Chinese manufacturing data. The benchmark Nikkei 225 index added 60.36 points to 14,486.41, while the Topix index of all first-section shares edged up 0.62 percent, or 7.37 points, to 1,203.35.
A weak dollar weighed on the headline index in morning trade, but the unit notched up afternoon gains on the yen after banking giant HSBC said China's manufacturing activity expanded at its strongest pace in seven months in October. Tokyo's rise on Thursday was partly driven by bargain buying after the Nikkei tumbled 1.95 percent on Wednesday following day-earlier data that showed the US economy added 148,000 jobs last month.
That was well below forecasts for a gain of 180,000, even before a two-week government shutdown this month that may also have affected hiring. Analysts said the numbers suggest the Fed will hold off winding down its $85 billion a month bond-buying scheme put in place last year to kick-start growth. The bank has said it will only cut down on its purchases once the world's largest economy is strong enough.
A drawdown on the Fed stimulus is seen as positive for the dollar, so any delay in the central bank's timeline tends to weigh on the unit, which in turn hits shares of Japanese exporters. The dollar was changing hands at 97.47 yen in Thursday Tokyo afternoon trade, up from 97.32 in New York Wednesday afternoon. "The China data restored some confidence," an equity trading director at a foreign brokerage told Dow Jones Newswires.
"A test of the 100 yen mark for the dollar may be wishful thinking at present but it appears to have found a comfort zone at the 97 yen level." In share trading, Sony was down 1.26 percent to 1,872 yen, Canon lost 0.15 percent to 3,130 yen while Toyota shares reversed morning losses to finish up 0.15 percent to 6,330 yen. Hitachi soared 8.38 percent to 659 yen after the company more than doubled its net profit forecast to 32 billion yen for the first half of its fiscal year.