Japan stocks rise for second day as focus shifts to earnings reports

By Stanley White
TOKYO, Feb 2 (Reuters) - Japanese shares extended gains for
a second consecutive session on Tuesday, recovering from last
week's sharp sell-off, while growing optimism about corporate
earnings both domestically and in the United States also boosted
sentiment.
The Nikkei index .N225 rose 0.77% to 28,306.82 by 0155
GMT, with semiconductor-related shares and materials makers
leading gains. The broader Topix .TOPX rose 0.83% to 1,844.91.
Japanese stocks took their lead from an overnight jump in
U.S. tech shares ahead of earnings from Amazon.com AMZN.O and
Alphabet Inc GOOGL.O later in the day.
In addition, many Japanese companies are reporting earnings
this week, and some investors are betting that a gradual
recovery in the global economy will lift profits.
Worries about a short-squeeze triggered by U.S. retail
investors shook global markets last week, but volatile swings
have abated this week, which makes it easier for bullish
investors to buy shares and other riskier assets.
"U.S. markets are starting to settle down, so we can turn
our attention back to earnings and fundamentals," said Takashi
Nishizawa, head of research at Nomura Securities.
"The U.S. economy is on a stable footing. There's optimism
about earnings for the U.S. tech sector and Japanese
manufacturers."
Leading gains on Topix, Sony Corp 6758.T jumped 3.15%,
followed by Murata Manufacturing Co 6981.T surging 3.02%.
Top decliners were Keyence Corp 6861.T and Hoya Corp
7741.T falling 1.94% and 1.40%, respectively.
The Japanese government is expected to extend a state of
emergency for Tokyo and surrounding cities later in the day to
curb a spike in coronavirus infections, but investors shrugged
this off as they focused on earnings outlook. There were 165 advancers on the Nikkei index, against 56
decliners.
The volume of shares traded on the Tokyo Stock Exchange's
main board .TOPX was 0.45 billion, compared to the last 30-day
average of 1.16 billion.