Japan's Nikkei rises as investors step in after two-day drop
TOKYO, Nov 28 (Reuters) -Japan's Nikkei share average erased early losses to trade higher on Thursday after two straight sessions of losses made stocks relatively cheaper.
The Nikkei .N225 was 0.42% higher at 38,295.13 by the midday break, after falling as much as 0.87% earlier in the session.
The broader Topix .TOPX was up 0.55% at 2,679.96.
"We saw little market-moving cues today, but investors wanted to buy back cheap stocks. Even shares in Toyota rose despite a stronger yen," said Seiichi Suzuki, chief equity market analyst at Tokai Tokyo Intelligence Laboratory.
"Japanese stocks are cheap relative to U.S. stocks."
Toyota shares, which fell 3.5% for the week, rose 0.72%. Peer Honda Motor 7267.T gained 0.85%.
Chip-making equipment maker Tokyo Electron 8035.T jumped 6.45% to become the biggest boost on the Nikkei.
Wall Street's main indexes closed lower on Wednesday, with the Nasdaq leading the declines, as technology stocks slumped on worries that the Federal Reserve might be cautious about rate cuts after stubbornly strong U.S. inflation data. .N
The yen has rallied sharply for two days, rising through its 200-day moving average to 151.50 per dollar JPY=EBS. FRX/
A stronger Japanese currency tends to hurt the shares of exporters, as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.
The yen's strength drove expectations that the Bank of Japan might not raise its policy rate at its December meeting, which was positive for local equities, said Suzuki.
Just over half of the economists surveyed in a Reuters poll expected the BOJ to raise interest rates again next month as a strengthening economy and concerns over the depreciating yen prompt policymakers to act.
Overnight index swaps (OIS) indicated a 56% chance of the BOJ raising rates to 0.5% in December, as of 0205 GMT. 0#JPYIRPR
Staffing agency Recruit Holdings 6098.T fell 1.65%, weighing on the Nikkei the most.
Reporting by Junko Fujita; Editing by Abinaya Vijayaraghavan
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