Japanese shares track Wall St higher; Toyota bounces back

TOKYO, Aug 25 (Reuters) – Japanese shares rose for a third straight session on Wednesday, underpinned by strength on Wall Street overnight, with buying back beaten down Toyota Motor and other related stocks.

The Nikkei share average rose 0.35% to 27,829.86 by 0212 GMT, while the broader Topix also gained 0.35% to 1,941.00.

All three major U.S. stock indexes ended higher on Tuesday, with the S&P 500 and the Nasdaq closing at all-time highs.

“There is no reason to sell Japanese stocks after the S&P and Nasdaq reached record highs. Investors are buying back auto and other cyclical shares that were oversold,” said Shigetoshi Kamada, general manager at the research department at Tachibana Securities.

Toyota Motor, which has shed about 3.35% this month, rose 2.38%. Its shares fell recently after it announced a global production cut.

Nissan Motor rose 2.34%, while Toyota’s autoparts maker Denso advanced 1.84%.

Steel makers also climbed, with JFE Holdings jumping 2.28% and Nippon Steel rising 1.95%.

Airlines added 1.41% on expectations of a recovery in the industry.

However, gains on the indexes were capped by concerns about the worsening wave of new COVID-19 infections in Japan, said Yutaka Miura, senior technical analyst at Mizuho Securities.

The country is set to expand a state of emergency to eight more prefectures, taking the total to 21, as a surge in cases overwhelms its hospitals.

DIC was the worst performer on the index, falling 2.71%. This was followed by Ebara, down 2.21% and Toyobo, which fell 2.06 %.

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