Japanese Shares Gain as Shippers Advance; Olympus Tumbles

Japanese shares rose a third day, with the Topix (TPX) index headed for the longest winning streak in almost seven weeks, as shipping lines advanced. Olympus Corp. (7733) tumbled after saying it will be prosecuted in the U.K.

Nippon Yusen K.K. climbed 2.8 percent as shippers gained the most among the Topix’s 33 industry groups after Nomura Holdings Inc. raised its outlook on the sector. Toyota Motor Corp. rose 0.5 percent as the yen weakened. Olympus sank 2.9 percent after saying U.K. authorities will charge the endoscope maker with misleading auditors.

The Topix climbed 0.6 percent to 1,156.30 at the close in Tokyo after falling as much as 0.8 percent amid mounting concern the U.S. will strike Syria. The gauge yesterday added 2.8 percent, the most since Aug. 2. The Nikkei 225 Stock Average gained 0.5 percent to 14,053.87, its highest in almost a month.

“If the U.S. does take military action against Syria, there’s a chance it won’t end quickly and oil prices will remain high,” said Hiroichi Nishi, a Tokyo-based equities manager at SMBC Nikko Securities Inc., a unit of Japan’s second-biggest lender by market value. “Optimism for increased earnings because of the weaker yen, stronger oil prices and hopes that Japan will get chosen to host the Olympics is supportive for the stock market, so there will be some buying on dips.”

Futures on the Standard & Poor’s 500 Index climbed 0.1 percent. The gauge added 0.4 percent in New York yesterday as the Institute for Supply Management’s U.S. manufacturing index increased to 55.7 in August, the strongest since June 2011, from 55.4 in July. The median forecast in a Bloomberg survey was 54. Readings above 50 percent indicate growth.

Syria Situation

U.S. stocks pared gains after Speaker of the House John Boehner and Majority Leader Eric Cantor backed President Barack Obama on strikes against Syria. The head of state urged Congress to take a prompt vote authorizing military strikes. Leaders of the Senate Foreign Relations Committee agreed on a draft resolution permitting force against Syria that would set a 90-day limit on any action.

Shippers gained the most on Japan’s broader equity gauge, with the Topix Marine Transportation Index rising 2.7 percent. Mitsui O.S.K. Lines Ltd. (9104), Japan’s biggest shipper by market value, added 2.2 percent to 416 yen. Nippon Yusen, the second-biggest, gained 2.8 percent to 296 yen.

A recovery in the euro-region economy and an increase in iron-ore freight rates will support shares, Nomura analyst Masaharu Hirokane wrote in a report.

Sales Tax

Prime Minister Shinzo Abe will announce his decision on Oct. 2 on whether to raise the sales tax, Kyodo News reported today, citing an unidentified person in the government. Japanese shares could plunge 10 percent or more if the levy isn’t increased as planned, according to 22 of 32 economists in a Bloomberg News survey. Japan is set to lift the 5 percent consumption tax to 8 percent in April 2014 and to 10 percent in October 2015 to curb the world’s heaviest debt load.

The Bank of Japan began a two-day policy meeting today. The central bank will probably refrain from adding to the unprecedented easing unveiled in April, according to a Bloomberg News survey of economists.

“Some investors are hopeful that should they increase the sales tax, they will also add some additional monetary easing or an extra budget as a package,” said Yoshihiro Ito, chief strategist at Okasan Online Securities in Tokyo.

Yen, Exporters

The yen lost 0.1 percent to 99.72 against the dollar, after earlier rising as much as 0.2 percent earlier. Toyota, which earlier fell as much as 1.1 percent, reversed declines to rise 0.5 percent to 6,230 yen. Honda Motor Co., which gets over 80 percent of its revenue outside Japan, rose 0.6 percent to 3,675 yen, reversing a 1.4 percent drop.

Camera-maker Canon Inc. climbed 3.8 percent to 3,145 yen on a plan to buy back up to 1.6 percent of outstanding shares for as much as 50 billion yen.

Among stocks that declined, Olympus dropped 2.9 percent to 2,798 yen. The stock lost as much as 6.3 percent after saying the U.K.’s Serious Fraud Office alleged that Olympus’s Gyrus Group Ltd. unit misled auditors in 2009 and 2010. The endoscope maker was fined 700 million yen in Japan for covering up losses.

The Topix traded at 1.21 times book value today, compared with 2.41 for the S&P 500 and 1.70 for the Stoxx Europe 600 Index yesterday. The Japanese measure’s 30-day historic volatility was at 28.21 today, compared with its five-year median of 19.42.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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