Japan’s Topix Caps Longest Losing Streak Since November

Japan’s Topix (TPX) index retreated for a fifth day, capping its longest losing streak since November, as insurance companies and energy explorers led declines.

NKSJ Holdings Inc. dropped 2.3 percent as insurers sank the most among the 33 Topix subsectors. Inpex Corp., Japan’s largest energy explorer, slid 1.1 percent as oil fell. Mobile carrier SoftBank Corp. rose 4 percent, overtaking Mitsubishi UFJ Financial Group Inc. as the nation’s No. 2 company by value.

The Topix slid 0.1 percent to 1,173.99 at the close in Tokyo, capping its first five-day fall since elections were called that brought Prime Minister Shinzo Abe to power. The Nikkei 225 Stock Average (NKY) decreased 0.1 percent to 14,157.25. Abe said on Oct. 1 he’d raise the sales levy and prepare measures to soften its impact, including considering a reduction in taxes on businesses. Investors are also watching for progress on ending the impasse over federal spending that shut parts of the U.S. government for a second day.

“The market is lacking catalysts after the consumption tax hike was announced,”said Osamu Koizumi, a Tokyo-based executive officer at Meiji Yasuda Asset Management Co., which oversees the equivalent of $18 billion in assets. “It’s going to be rather quiet until talk about cutting corporate taxes gains momentum. Plus, the U.S. government shutdown is continuing and we don’t know how long it’ll last.”

The Topix Insurance Index dropped 1.5 percent, with NKSJ sliding 2.3 percent to 2,463 yen. MS&AD Insurance Group Holdings Inc. lost 1.9 percent to 2,473 yen.

Oil Falls

Energy explorers retreated after West Texas Intermediate oil for November delivery dropped as much as 62 cents to $103.48 a barrel in electronic trading on the New York Mercantile Exchange. Inpex declined 1.1 percent to 1,143 yen. Japan Petroleum Exploration Co. fell 0.6 percent to 4,130 yen.

Futures on the Standard & Poor’s 500 Index slid 0.2 percent today. The measure declined 0.1 percent yesterday as the closure of government continued. A partial shutdown lasting one week would probably shave 0.1 percentage point from economic growth, according to the median estimate of economists surveyed by Bloomberg, with the costs accelerating if the standoff persists.

A report yesterday showed U.S. companies added fewer workers than projected in September, indicating the job market is struggling to gain momentum. The 166,000 increase followed a revised 159,000 rise in August that was smaller than initially estimated. The median forecast of economists surveyed by Bloomberg was for an advance of 180,000.

‘Buy on Dips’

“The U.S. debate over funding could fall either way and in light of the uncertainty it’s hard to take on new risk,” said Takashi Miyazaki, general manager of strategic research and investment at Mitsubishi UFJ Asset Management Co., a unit of the nation’s biggest bank. “It’s caused the yen to rise but the feeling is that the bad news has been priced in for now. The market consensus is to buy on dips.”

Japan’s currency advanced 0.9 percent against the dollar in the two days after the U.S. shutdown and Japan sales-tax announcement, before paring gains today.

SoftBank jumped 4 percent to 7,530 yen. Billionaire Chairman Masayoshi Son is forecasting record domestic earnings this year as he accelerates the addition of new subscribers and after buying a controlling stake in Sprint Corp. With today’s gain, the mobile phone operator’s market value exceeded that of Mitsubishi UFJ to become Japan’s second-largest company by value after Toyota Motor Corp.

Daikin Industries Ltd. (6367), which produces air-conditioners, climbed 4.8 percent to 5,270 yen after the Nikkei newspaper reported its free cash flow may turn positive this fiscal year.

The Topix traded at 1.23 times book value today, compared with multiples of 2.49 for the S&P 500 and 1.75 for the Stoxx Europe 600 Index yesterday. The Japanese measure’s 30-day historic volatility was at 18.30 today, compared with its five-year median of 19.34.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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