Toyota Motor Corp., which gets about 75 percent of sales overseas, increased 1.3 percent as carmakers were the biggest contributors to the gauge’s rise. Shiseido (4911) Co. jumped 5.8 percent after Citigroup Inc. recommended the cosmetics company’s shares. Open House Co. surged 26 percent as the provider of real-estate services made its debut on the Tokyo Stock Exchange. Mitsui O.S.K. Lines Ltd., Japan’s second-biggest shipping line, dropped 3.2 percent as the sector slid the most among the Topix’s 33 groups.
The Topix added 0.3 percent to 1,218.98 at the close in Tokyo, completing a 2.8 percent advance for the week ahead of a three-day weekend. The Nikkei 225 (NKY) Stock Average slid 0.2 percent to 14,742.42 after rising as much as 0.3 percent. Investors also awaited Germany’s general election on Sept. 22.
“The yen’s drop yesterday is a plus for stocks, of course, but investors want to square positions ahead of a long weekend and the German polls,” said Kenji Shiomura, a Tokyo-based senior strategist at Daiwa Securities Group Inc., Japan’s second-largest brokerage. “The market is due a correction after rising fast over the past few days.”
The Topix (TPX) advanced 10 percent over the past three weeks and is within 4.5 percent of its May 22 high. The gauge is up 42 percent this year, making Japanese equities the best performers among developed markets as the Bank of Japan’s monetary easing helped weaken the yen, supporting exporters.
Japan’s currency slid 1.5 percent against the dollar yesterday before paring losses and trading at 99.36 today. A weaker yen boosts the value of overseas earnings at exporters.
Toyota climbed 1.3 percent to 6,480 yen. Nikon Corp., a camera maker that generates 26 percent of sales in Europe, soared 6.4 percent to 1,809 yen, the most on the Nikkei 225, as the yen traded near a four-year low against the euro.
Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The measure lost 0.2 percent yesterday after rallying to a record on Sept. 18 when the Federal Reserve unexpectedly refrained from reducing stimulus.
Investors are watching German Chancellor Angela Merkel’s bid for re-election on Sept. 22. Merkel has campaigned on her leadership through the regional debt crisis and a reduction in unemployment to a record low. Should her Christian Democratic-led bloc fall short of a majority with its Free Democrat coalition partner, she may be forced into a so-called grand coalition with the opposition Social Democrats.
Among other stocks that rose, Shiseido gained 5.8 percent to 1,725 yen, its highest since January 2011, after its rating was raised to buy at Citigroup. The company’s shares jumped 8.8 percent this week.
Open House surged 26 percent from its initial public offering price to 2,245 yen on its first trading day on the TSE first section. The company, founded in 1997, sells houses and apartments in Tokyo and neighboring Kanagawa.
The Nikkei’s 14-day relative strength index, a measure of trading momentum, was at 66 today, near the 70 threshold that some traders say portends a selloff.
“Technically speaking, the market has been overbought. Selling pressure is high with the Nikkei around 15,000,” said Kazuyuki Terao, the Tokyo-based chief investment officer of Allianz Global Investors Japan Co.
Mitsui O.S.K. (9104) fell 3.2 percent to lead declines on the Nikkei 225 after surging 7.3 percent in the past two days. Its RSI fell to 62.5 after rising to 70.4 yesterday. Nippon Yusen K.K., Japan’s biggest shipper, lost 1.6 percent to 316 yen.
Tokyo Electric Power Co. slipped 2.3 percent to 514 yen. Prime Minister Shinzo Abe, on a visit to the Fukushima Dai-Ichi nuclear plant yesterday, urged the company to decommission the site’s two remaining reactors. The utility stated it would need to raise another 1 trillion yen to do so and would make a decision by the end of the year, Abe said.
The Topix traded at 1.27 times book value today, compared with 2.53 for the S&P 500 and 1.77 for the Stoxx Europe 600 Index yesterday. The Japanese measure’s 30-day historic volatility was at 19.80 today, compared with its five-year median of 19.42.
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