Japan’s Topix Rises First Time in Five Days Before Fed

Japanese shares rose, with the Topix (TPX) index advancing for the first time in five days, as investors weighed economic data and speculated on the timing of stimulus cuts ahead of today’s Federal Reserve policy meeting.

Honda Motor Co. (7267), which gets almost half its revenue from North America, added 0.7 percent. Dai-ichi Life Insurance Co. gained 3.8 percent after Barclays Plc raised its investment outlook on the stock. Sumitomo Chemical Co. increased 6.6 percent after Bank of America Corp. recommended the shares. Riso Kyoiku Co. plunged 15 percent after the cram-school operator said it will form an independent panel to assess whether improper accounting took place at a subsidiary.

The Topix gained 0.8 percent to 1,232.31 at the close in Tokyo, with all but three of its 33 industry groups climbing. The measure lost 2.7 percent in the previous four trading sessions. The Nikkei 225 (NKY) Stock Average increased 0.8 percent to 15,278.63. Reports showed manufacturing growth in the U.S. and Europe ahead of the Fed’s two-day meeting.

“The likelihood of the U.S. tapering stimulus has increased, but that’s proof that the economy is strong,” said Toshihiko Matsuno, a strategist at Tokyo-based SMBC Friend Securities Co., a unit of Sumitomo Mitsui Financial Group Inc. “The market has priced in a lot of the negative aspects of tapering.”

Fed policy makers have scrutinized data and watched Washington’s budget negotiations to determine whether economic growth is robust enough to withstand the withdrawal of some monetary support. The House of Representatives last week passed a budget that limits automatic spending cuts and avoids another government shutdown. The Senate is expected to vote this week.

The Fed may begin reducing asset purchases at its Dec. 17-18 meeting, according to 34 percent of economists in a Dec. 6 Bloomberg survey, up from 17 percent in a Nov. 8 poll, with the rest expecting reductions next year.

Exporters Advance

The yen was little changed against the dollar today at 102.97. The currency gained 0.2 percent yesterday.

Honda added 0.7 percent to 4,090 yen. Panasonic Corp., which makes Viera televisions, increased 2.6 percent to 1,170 yen. Nintendo Co., which gets 37 percent of revenue from the Americas, climbed 0.9 percent to 2,640 yen.

Dai-ichi Life (8750) climbed 3.8 percent to 1,620 yen after Barclays upgraded the stock to overweight from equalweight and boosted its price target to 2,050 yen from 1,300 yen.

Sumitomo Chemical jumped 6.6 percent to 418 yen, the most on the Nikkei 225. Bank of America Merrill Lynch raised the stock to buy from neutral.

Among stocks that fell, Riso Kyoiku tumbled 15 percent to 567 yen, the most since March 2011. The company will create a third-party panel to look into possible accounting fraud at its subsidiary, it said in a statement yesterday.

The Topix rose 43 percent this year, the most among 24 major developed markets tracked by Bloomberg, as Prime Minister Shinzo Abe and the Bank of Japan took steps to end 15 years of deflation. The Topix traded at 1.25 times book value, compared with multiples of 2.57 for the S&P 500 and 1.74 for the Stoxx Europe 600 Index yesterday.

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: Sarah McDonald at smcdonald23@bloomberg.net

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