TOKYO: Japanese stocks rose, rebounding from the biggest two-day plunge since 2011, after China cut interest rates. Utilities and insurers led gains.
Kyushu Electric Power Co. jumped 3 percent after saying it will boost output at a nuclear reactor it restarted this month. Insurers gained after the Nikkei newspaper reported Nippon Life Insurance Co. will buy a local rival. Fuji Heavy Industries Ltd. soared 5.7 percent as Credit Suisse Group AG said recent selling was overdone. Fast Retailing Co. was the biggest drag on the Nikkei 225 Stock Average, dropping 0.5 percent, after a broker cut its price target on the Uniqlo brand operator.
The Topix index added 2 percent to 1,461.49 as of 12:40 p.m. in Tokyo, with all but two of its 33 industry groups rising, after an 8.9 percent slump in the previous two days. The Nikkei 225 gained 1.3 percent to 18,032.37. The yen weakened 0.4 percent to 119.34 per dollar, sliding for a second day. The Shanghai Composite Index rose for the first time in five days after the People’s Bank of China rate cut.
“The Chinese central bank has belatedly made a move,” said Hiroichi Nishi, a manager at SMBC Nikko Securities Inc. in Tokyo. “One of the reasons behind the steep falls so far was the fact that the Chinese authorities hadn’t done anything. The fact that they have now shows that they’re determined not to let the economy worsen.”
After the Shanghai index fell 7.6 percent Tuesday to cap a 22 percent, four-day plunge, China’s policy makers cut interest rates for the fifth time since November and lowered the amount of cash banks must set aside. The PBOC reduced the one-year lending rate by 25 basis points to 4.6 percent and lowered the reserve ratio — the minimum amount required to be held by banks — by 50 basis points.
