Most Japanese stocks rose as the yen’s drop to a nine-month low against the dollar brightened the earnings outlook for the nation’s exporters. Gains were limited as technical indicators suggested the market was overbought.
Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, rose 1.2 percent. Parco Co. surged 11 percent after J Front Retailing Co. agreed to buy a 33 percent stake in the shopping- center operator. Inpex Corp. (1605) led mining companies lower as crude fell from its highest level in more than nine months.
The broader Topix Index gained 0.1 percent to 835.25 as of the 3 p.m. close in Tokyo, with about eight stocks advancing for every seven that rose. The Nikkei 225 Stock Average (NKY) fell 0.1 percent to 9,633.93 after swinging between gains and losses at least seven times.
“It’s huge fuel for Japanese exporters if the yen can maintain or continue to depreciate,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “I think the downside risk has mitigated and as a result investors are happier to embrace a more positive outlook.”
The yen touched 81.67 per dollar today, the lowest level since May 31. A weaker yen boosts Japanese companies’ overseas earnings. Sony advanced 1.2 percent to 1,760 yen. Honda Motor Co. (7267), Japan’s second-largest carmaker by market value, rose 1.6 percent to 3,140 yen.
Futures on the Standard & Poor’s 500 Index (SPXL1) lost 0.2 percent today. The gauge added 0.2 percent in New York on Feb. 24, capping a second weekly gain, after Greece secured a second debt bailout and U.S. new homes sales beat estimates in January. Stocks also rose after consumer sentiment reached a one-year high in the world’s largest economy.
Mining firms fell the most among the 33 Topix industry groups as oil slid after the International Monetary Fund warned the global economy is still at risk of a slowdown.
Inpex, Japan’s No. 1 energy explorer, fell 2.5 percent to 588,000 yen. Smaller Japan Petroleum Exploration Co. dropped 2 percent to 3,985 yen.
Parco surged 11 percent to 855 yen after J Front Retailing, Japan’s second-largest department-store operator, agreed to pay 30.1 billion yen ($371 million) for a stake in the fashion retailer. J Front lost 0.4 percent to 392 yen.
Gains in stocks were limited as the 14-day relative strength index for the Nikkei 225 had a reading of 80 today, above the 70 threshold that indicates to some traders that an asset has been overbought and may fall.
Japan’s TSE Second Section Price Index (TSE2), a measure of smaller companies on the Tokyo Stock Exchange, rose today for the 30th day, its longest stretch of gains ever, according to data compiled by Bloomberg stretching back to 1961. The gauge added 0.3 percent to 2,381.96.
The Topix has risen 6.2 percent since Feb. 14, when the Bank of Japan joined a global spree of monetary easing by increasing its government-bond purchases, weakening the yen. The gain has boosted the value of stocks listed on the Topix to 1 times estimated book value, up from 0.8 in November, according to data compiled by Bloomberg. A number below 1 means companies can be bought for less than value of their assets.
The Nikkei 225 Volatility Index (VNKY) rose 6.6 percent to 22.20, indicating traders expect a swing of about 6.4 percent on the benchmark gauge over the next 30 days.
The following were among the most active shares in the Japanese market today. Stock symbols are in parentheses after company names.
Fujitsu Ltd. (6702) (6702 JT), a Japanese computer maker, gained 1.8 percent to 445 yen after the Nikkei newspaper reported that Fujitsu and Mitsui & Co. (8031) will set up a community venture in Japan. Mitsui rose 0.1 percent to 1,397 yen.
Softbank Corp. (9984) (9984 JT), a mobile phone carrier, fell 2.6 percent to 2,359 yen after a report it plans to hire as many as 2,400 additional employees, according to the Nikkei.
Tokyo Dome Corp. (9681) (9681 JT), a stadium operator and hotelier, rose 3.7 percent to 226 yen after reporting preliminary net income of 300 million yen for the year ended Jan. 31, beating its earlier projection for a loss, citing high hotel occupancy and cost cuts.
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