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TOKYO, Jan 23, 2008 (AFP) - Japanese share prices pared sharp early gains in afternoon trade Wednesday as investors adjusted positions following a surprise US rate cut in response to mounting recession fears, dealers said.
The benchmark Nikkei-225 index, which had jumped 3.35 percent in the morning session in response to the US Federal Reserve action, was up 0.79 percent an hour and a half before the closing bell.
"It is mainly a technical move as traders are readjusting their positions. Too many were short and saw their positions suddenly reversed," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.
But he said the market continued to be boosted by the Federal Reserve, which slashed interest rates by 75 basis points after a major selloff on global markets on worries about the US economy.
He said the market was also supported by a weaker yen, which supports exporters' shares, and by the Hong Kong Monetary Authorities' decision to slash its own base rate.
"That gave a sense of relief to Asian investors that shares will be supported somehow or another," Uno said of Hong Kong's cut. "Basically, fear of a fallout has thinned."
The Nikkei-225 index was up 99.65 points at 12,672.70 points from the previous day's close.
The broader Topix index of all-first section shares was up 15.74 points or 1.29 percent at 1235.69.
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