Most Japan Stocks Rise on Utilities; China Limits Gains

Most Japanese stocks rose, led by utilities on speculation the nation won’t halt construction of nuclear reactors. Shares of Japanese companies operating in China fell as a political dispute escalated between the two nations, leading to widespread protests.

Hokuriku Electric Power Co. (9505), an operator of nuclear power stations, jumped 6.4 percent. Companies including Honda Motor Co. and Fast Retailing Co. slid as stores and factories in China were shut. Sony Corp. (6758) climbed 4.5 percent on a report the nation’s biggest consumer-electronics exporter is in final talks to invest in Olympus Corp.

“There is concern that anti-Japanese protests may reduce investment into China in the mid and long term,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, which oversees about 15 trillion yen ($191 billion). “The situation is uncertain and we don’t know how long it will last.”

The Topix (TPX) Index climbed 0.2 percent to 758.36 at the 3 p.m. close in Tokyo, with about five shares rising for every three that fell. The Nikkei 225 Stock Average (NKY) fell 0.4 percent to 9,123.77 after rising as much as 0.2 percent earlier. Volume on the gauge was more than 20 percent above the 30-day average.

The Topix rebounded 9 percent from this year’s low on June 4 as central banks step up measures to promote global economic growth. The price of shares on the gauge stood at 0.9 times book value, compared with 2.3 times for the Standard & Poor’s 500 Index and 1.5 times for the Europe Stoxx 600 Index. A number less than one means that companies can be bought for less than the value of their assets.

Utilities Climb

Utilities gained the most among the Topix’s 33 industry groups after the Nikkei newspaper reported Japanese Trade Minister Yukio Edano signaled he has no plans to stop construction of reactors that have already been approved, despite a goal to scrap nuclear power by the end of the 2030s.

Hokuriku Electric soared 6.4 percent to 917 yen. Tohoku Electric Power Co. jumped 4.3 percent to 535 yen.

Shares of Japanese companies operating in China declined as a territorial dispute sparked the worst diplomatic crisis between the two nations since 2005, putting at risk a trade that’s tripled in the past decade to more than $340 billion. Japan last week purchased islands claimed by both nations.

Fast Retailing sank 7 percent to 17,480 yen after shutting 42 of its Uniqlo apparel shops in China. Aeon Co. fell 2.8 percent to 872 yen after the Nikkei newspaper reported it suffered 2.5 billion yen ($32 million) in damages in China. Retailers led declines on the Topix, followed by carmakers.

Honda, Toyota Motor Corp. (7203) and Nissan Motor Co. all reported damage to dealerships in the eastern Chinese city of Qingdao. Separately, Phoenix Satellite Television Holdings Ltd. showed footage of Japanese cars that had been overturned, with windshields smashed by protesters.

Carmakers Slide

“Carmakers are supposed to be rising the most today, but concerns about various anti-Japanese movements are dragging them down even though the yen is weakening,” Resona Bank’s Toda said.

Honda lost 2.5 percent to 2,604 yen. Nissan, the biggest Japanese automaker by sales in China, sank 5 percent to 701 yen. Toyota slid 0.6 percent to 3,195 yen.

The yen depreciated to as low as 78.93 against the dollar last night in Tokyo, compared with 77.57 at the close of stock trading on Sept. 14. Japan’s currency weakened to 103.86 against the euro, the lowest since May 9, from 101.13. A weaker yen boosts overseas income at Japanese companies when repatriated.

Canon Inc. (7751), a camera maker that gets almost 60 percent of its sales from Europe and the Americas, rose 1 percent to 2,812 yen. Ricoh Co., an office-equipment maker that generates more than 45 percent of its revenue in the two regions, advanced 1.5 percent to 683 yen.

Sony gained 4.5 percent to 1,027 yen after public broadcaster NHK reported on Sept. 14 the company will invest about 50 billion yen in Olympus and set up a company to manufacture medical equipment. Olympus slipped 1 percent to 1,540 yen after rising as much as 4.6 percent earlier today.

Futures on the S&P 500 fell 0.1 percent today. The gauge fell 0.3 percent yesterday after manufacturing in the New York region contracted more than forecast as orders shrank.

To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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