SYDNEY, March 24 (Reuters) - Japan’s share benchmark Nikkei climbed nearly 7% to its highest level in 1-1/2 weeks on Tuesday, outperforming regional peers, supported by hopes of buying by the Bank of Japan (BOJ) and public pension funds.
The Nikkei average gained 6.7% to 18,026.73, its highest since March 13, by the midday break. If sustained until the close, it would be the biggest daily rise for the Nikkei since November 2016.
The Nikkei’s volatility index, a measure of investors’ volatility expectations based on option pricing and considered to be a fear gauge, slid 16.3% to 45.60, further off a nine-year peak of 60.86 hit a week ago.
U.S S&P 500 stock futures last traded 3.5% higher and MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 4.3% as the Federal Reserve’s promise of bottomless dollar funding eased strains in financial markets.
In addition to the Fed’s unlimited QE, hopes of stock buying by the BOJ, public pension funds and buyback by listed companies supported the Tokyo market, analysts said.
Some think the fact that the BOJ has been buying a considerable amount of Exchanged Traded Funds (ETFs) in a more random manner than before, makes speculative players hesitant to short Japanese stocks.
Nikkei heavyweight SoftBank Group Corp surged 20.2%, extending a run that began a day earlier when the tech conglomerate announced up to $41 billion in asset sales and a record share buyback to shore up its collapsing share price.
The broader Topix rose 3.1% to 1,331.66 by the midday recess, with all but three of the 33 sector sub-indexes on the Tokyo Stock Exchange in positive territory.
Notable gainers included oil and semiconductor-related companies, with Japan’s top oil and gas company Inpex Corp climbing 12.6% and chipmaking equipment supplier Tokyo Electron Ltd soaring 16.4%. (Reporting by Tomo Uetake; Editing by Subhranshu Sahu)