TOKYO, March 15 (Xinhua) -- Japan's benchmark Nikkei stock index ended fractionally higher Wednesday as banking stocks bounced back after a two-day selloff on concerns over the health of the U.S. banking sector and concerns contagion could impact the sector here.
The 225-issue Nikkei Stock Average edged up 7.44 points, or 0.03 percent, from Tuesday to close the day at 27,229.48.
The broader Topix index, meanwhile, added 12.58 points, or 0.65 percent, to finish at 1,960.12.
Dealers here said that concern remained over the stability of the U.S. financial system following the recent failures of two major banks including Silicon Valley Bank (SVB), although panic-selling had stopped for now.
"For the time being, calm has returned to the market, but the SVB problem still needs to be monitored closely, that seems to be the feeling among investors," Kazuo Kamitani, a strategist at Nomura Securities, was quoted as saying.
Japanese Finance Minister Shunichi Suzuki on Wednesday continued to try and allay fears of Japan's banking sector being impacted by the U.S. banks' collapsing, telling parliament the structure of Japanese banks' deposits is different from those in the U.S.
"Japan's financial system is stable as a whole, as banks have sufficient capital buffers against risks," Suzuki said.
But market strategists here said, however, that while financial issues rebounded, caution remained over the technology sector amid concerns tougher U.S. banking regulations may be instituted.
"Investors have become worried about companies' exposure to technology firms with financing issues through their investments, as U.S. authorities could step up restrictions," Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co., was quoted as saying.
Adding to a cautious mood, inflation data in the United States suggested that the U.S. Federal Reserve may continue with its hefty rate hikes, renewing fears the world's largest economy could be tipped into a recession, analysts here said.
Technology Startup investor Softbank Group weighed on the market, dropping 1.4 percent, while fellow heavyweight Fast Retailing, operator of the Uniqlo clothing chain, lost 1.7 percent.
Among financial issues bought back, Mitsubishi UFJ Financial Group climbed 4.7 percent, while Sumitomo Mitsui Financial Group and Mizuho Financial Group gained 3.1 and 2.0 percent, respectively.
Regional banks Suruga and Shimane Bank also found favor, both advancing more than 5 percent.
By the close of play, bank, insurance and mining shares were among notable gainers.
Information and communication, land transportation and rubber product issues, meanwhile, comprised those that declined the most.
The turnover on the third trading day of the week came to 2,962.19 billion yen (21.93 billion U.S. dollars). ■