TOKYO, Jan. 20 (Xinhua) -- Tokyo stocks bounced back Thursday as investors sought out bargains following the market's slump the previous day to a near five-month low.
The 225-issue Nikkei Stock Average gained 305.70 points, or 1.11 percent, from Wednesday to close the day at 27,772.93.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, added 18.81 points, or 0.98 percent, to close at 1,938.53.
Local brokers said trading started off circumspect with stocks yo-yoing, but buying gathered steam in the afternoon as U.S. stock futures rising and Asian bourses rallying buoyed sentiment.
They said that some heavily weighted issues that had lost ground the previous day were bought back on dips, with investors shrugging off reports of further COVID-19 quasi emergency measures likely to be announced for more regions across the nation amid a surge in virus cases.
"In the morning, market participants were unsure of when to buy on dips. But in the afternoon, external factors like advances in U.S. stock futures and a weakening yen improved sentiment," Shingo Ide, chief equity strategist at the NLI Research Institute, was quoted as saying.
Other market strategists confirmed that dip-buying propelled the Nikkei higher, with a market participant at a domestic securities firm, quoted as saying, "The Nikkei has dropped to a level where it looks cheap, tempting investors to come in and buy the dip."
Analysts said however that trading could face headwinds as 16 prefectures in Japan have already or are in the process of being placed under a quasi-emergency due to a surge in COVID-19 cases, according to Deputy Chief Cabinet Secretary Seiji Kihara, with more prefectures likely to follow suit.
On Wednesday, Japan reported more than 41,400 new daily infections, surpassing the 40,000-mark for the first time. It was the second straight day that the nationwide virus figure hit a new record.
After markets here closed Thursday, Tokyo reported a new record of 8,638 new daily COVID-19 cases, compared to Wednesday's previous record high of 7,377 new infections.
By the close of play, precision instrument, service and food issues comprised those that declined the most, with issues rising outpacing falling ones by 1,559 to 539 on the First Section, while 86 ended the day unchanged.
Heavily weighted Nikkei component Fast Retailing, owner of the Uniqlo chain of casual clothing stores, helped underpin the market, adding 1.7 percent, while department store operator Isetan Mitsukoshi Holdings leapt 5.3 percent.
Toyota accelerated 1.7 percent after skidding down 5 percent a day earlier, and Sony was a notable gainer, climbing 5.8 percent following a 12.8 percent nosedive a day earlier.
Chipmakers and shipping lines weighed on the market, however, with Tokyo Electron down 0.4 percent, while Advantest slid 1.6 percent.
Nippon Yusen lost 2.2 percent, Mitsui O.S.K. Lines sank 5.3 percent, while fellow shipper Kawasaki Kisen ended the day 6.5 percent lower.
On the main section on Thursday, 1,282.47 million shares changed hands, dropping from Wednesday's volume of 1,513.74 million shares.
The turnover on the penultimate trading day of the week came to 3,165.75 billion yen (27.71 billion U.S. dollars).