Japan’s Topix Advances on Developers, Mitsubishi Motors

Japan’s Topix index rose, paring the gauge’s second straight weekly decline in 2014, as developers climbed and Mitsubishi Motors Corp. surged.

The Topix Real Estate Index advanced 1.3 percent as Mitsubishi UFJ Asset Management Co. started a new fund today that counts developers as its biggest holdings. Mitsubishi Motors Corp. surged the most on the Nikkei 225 Stock Average amid speculation investors were buying shares to cover short positions. Fujikura Ltd. (5803), which makes wires and cables, jumped 9.7 percent after its rating was raised by Goldman Sachs Group Inc. Honda Motor Co., which gets almost half its revenue from North America, lost 1 percent as the yen held gains.

The Topix (TPX) rose 0.2 percent to 1,297.39 at the close of trading in Tokyo, after falling as much as 0.3 percent. The measure fell 0.1 percent this week after slipping 0.3 percent the previous period. The Nikkei 225 sank 0.1 percent today to 15,734.46. The yen was little changed at 104.37 per dollar after advancing 0.2 percent yesterday.

“The fervor we saw toward the end of last year still hasn’t cooled down,” said Kenji Ueno, a senior investment manager at Sompo Japan Nipponkoa Asset Management Co. “The market consensus is for fundamentals to continue recovering. While it’s not easy for shares to rise, investors are buying when they fall.”

Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The measure lost 0.1 percent yesterday, retreating from an all-time high, as Best Buy Co. tumbled and earnings at companies from Citigroup Inc. to CSX Corp. disappointed investors.

Foreigners Sell

“The Best Buy shocker, even with increased market share, was an indication of retailers slashing margins and gives worries about both corporate earnings and consumer appetite,” said Gavin Parry, managing director of Hong Kong-based brokerage Parry International Trading. “The drop in foreign buying of Japanese stocks set the tone this morning for the Tokyo market.”

Foreign investors sold a net 287 billion yen in Japanese shares in the week ended Jan. 10, according to Ministry of Finance figures released today.

Honda lost 1 percent to 4,141 yen. Toyota Motor Corp., the world’s biggest carmaker, fell 1 percent to 6,200 yen. Sony Corp., which gets nearly 70 percent of sales outside Japan, sank 1.3 percent to 1,780 yen.

The Topix jumped 51 percent in 2013, its third-biggest yearly gain on record, as Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda took steps to end 15 years of deflation. Strategists surveyed by Bloomberg expect the gauge will climb to 1,470 by the end of 2014, as the yen weakens amid prospects for further stimulus by the BOJ while the Federal Reserve cuts back.

New Fund

The Topix Real Estate Index advanced 1.3 percent today. Mitsubishi UFJ Asset Management’s Tokyo-related fund counts Mitsubishi Estate Co., Mitsui Fudosan Co. and Sumitomo Realty & Development Co. as its biggest holdings, according to model portfolio in the fund’s prospectus.

Mitsubishi Estate, Japan’s biggest developer by market value, gained 0.7 percent to 2,944 yen. Mitsui Fudosan, the No. 2, advanced 0.9 percent to 3,628 yen. Sumitomo Realty & Development rose 1.4 percent to 4,963 yen.

Mitsubishi Motors surged 10 percent to 1,280 yen, the most on the Nikkei 225. The gains in shares may be due to short-covering as well as “tight” demand for a secondary share placement announced on Jan. 7, Parry said.

Fujikura gained 9.7 percent to 530 yen for the second-biggest increase on the Nikkei 225. Goldman Sachs raised its rating on the stock to buy from neutral, and boosted its target price to 570 yen from 485 yen.

The Topix index traded at 1.32 times book value today, compared with 2.67 for the S&P 500 and 1.86 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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