Nikkei recovers close to levels seen before last week’s rout

Japan’s Nikkei 225 Stock Average recovered close to levels seen before the benchmark had its steepest plunge since October 1987 last week.

The blue-chip gauge advanced 2.3% to 35,825.15 as of 10:58 a.m. in Tokyo, rising after a long weekend as a weaker yen provided support for exporters such as automakers and tech firms. The yen declined 0.1% to 147.32 per dollar after weakening 0.4% on Monday.

Technology firms including Tokyo Electron Ltd. rose after Nvidia Corp. boosted the Philadelphia Stock Exchange Semiconductor Index. Rakuten was among the biggest gainers on the Nikkei 225 after the conglomerate showed a narrowing operating loss thanks to steady progress in its mobile business.

“The huge selloff peaked last week and investor attention is shifting to fundamentals like corporate profitability,” said Ikuo Mitsui, a fund manager at Aizawa Securities. “Investors are buying stocks amid cheaper valuations.”
Both the Nikkei 225 and the Topix plunged 12% on Aug. 5. They’re still down about 9% since the end of July, when the Bank of Japan raised its benchmark interest rate and unveiled plans to reduce its bond purchases.

The benchmarks have fallen around 13% from their records reached last month, after sliding into a bear market on Aug. 5 when losses exceeded 20%.