TOKYO, Aug. 26 (Xinhua) -- Tokyo stocks on Thursday rebounded from a 16-month closing low a day earlier, with Japan's key Nikkei stock index rising 0.69 percent and snapping a 4-day losing streak as a weaker yen lifted investor sentiment and investors picked up oversold shares on the cheap.
The 225-issue Nikkei Stock Average rose 61.09 points from Wednesday to 8,906.48, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 4.48 points, or 0.55 percent, to 811.79.
Brokers said that gains were capped however by ongoing uncertainty about the Japanese government's plans to rein in the strong yen which is severely impeding the nation's export-led recovery.
"A lack of policy action by authorities has led to a recent sell-off and I can't say we've seen the end," said Hideaki Higashi, assistant manager at SMBC Friend Securities Co.
"The market has been anxious to see when steps come out, and there is a possibility that we won't see action soon" before the Sept. 14 election to pick the Democratic Party of Japan's leader.
Coupled with this the uncertainty over Japanese Prime Minister Naoto Kan's political future is starting to weigh on the market, in light of political powerhouse Ichiro Ozawa's intentions to challenge Kan as leader of the Democratic Party of Japan.
"The fact that Ozawa has said he'll run ... means that whatever Kan might say about policy, the markets won't listen," said Norihiro Fujito, general manager at the investment research and information division of Mitsubishi UFJ Morgan Stanley Securities.
