Japanese Shares Swing on Energy Explorers, Paper Makers

Japanese shares swung between gains and losses as energy explorers and property developers rose while paper makers and airlines declined. Volume was low ahead of a Bank of Japan policy decision.

Japan Petroleum Exploration Co. (1662) led mining shares higher as crude-oil prices climbed for a third day. Mitsubishi Estate Co., Japan’s biggest developer, increased 1.8 percent, after earlier sliding 1.3 percent. Toyota Motor Corp. (7203) fell 0.3 percent, trimming a decline of as much as 1.6 percent, after the yen pared gains against the dollar.

The Topix fell 0.1 percent to 1,193.78 as of 10:40 a.m. in Tokyo, after rising as much as 0.2 percent. Volume was 17 percent below the 30-day intraday average. The Nikkei 225 Stock Average climbed 0.1 percent to 14,443.82. The BOJ will probably keep bond-buying unchanged as its two-day meeting ends today, according to a Bloomberg survey.

“While there is largely no change expected from the BOJ, the yen is unlikely to strengthen strongly, as there is also a small chance there could be some kind of surprise,” said Yuya Tsuchida, a strategist at Toyo Securities Co. in Tokyo. “But the stronger yen we had this morning has paused now, so that’s positive for the market.”

The Topix (TPX) gained 4.8 percent last week, bringing its increase over three weeks to more than 12 percent, the most since April 2009. After plunging as much as 18 percent from a May 22 high, the gauge has rebounded amid optimism Prime Minister Shinzo Abe will push through economic reforms following elections on July 21.

BOJ Meeting

The BOJ will leave its bond-buying program unchanged today, according to all 20 economists in a Bloomberg survey. Thirteen of them see no additional easing in the next six months.

The central bank will also discuss upgrading its assessment of the country’s economy by using the word “recover” for the first time in more than two years, people familiar with the bank’s discussions said earlier this month.

Futures on the Standard & Poor’s 500 Index gained 0.9 percent today. The gauge yesterday closed little changed as investors analyzed minutes from the Federal Reserve’s last meeting for signs of when the central bank might slow the pace of stimulus.

Minutes from the central bank’s June meeting, released yesterday in Washington, showed that while several members judged a reduction in asset purchases “would likely soon be warranted,” many officials want to see more signs employment is picking up before reducing bond purchases.

The Topix traded at 1.27 times book value yesterday, compared with 2.44 times for the S&P 500 and 1.66 times for the Stoxx Europe 600 Index. The gauge’s 30-day historic volatility was at 34.97 today, retreating from its July 2 high of 43.22.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

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

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