Japan Shares Rise After Yen Dips as Ukraine Tensions Ease

Japan’s Topix index rose for a second day after the yen yesterday declined the most in seven weeks as Russian President Vladimir Putin said he sees no immediate need to invade eastern Ukraine.

Honda Motor Co. (9983), a carmaker that gets more than 80 percent of sales overseas, increased 1.3 percent. Fujitsu Ltd. added 3.6 percent, the most in a month, after UBS AG raised its rating on the computer maker’s shares. A Topix gauge tracking real-estate shares led gains among the measure’s subsectors for a second day. Fuji Heavy Industries Ltd., which makes Subaru cars, slumped 1.8 percent after cutting its profit forecast.

The Topix climbed 0.7 percent to 1,212.90 at the close of trading in Tokyo, gaining the most in a week as all but four of its 33 industry groups advanced. The Nikkei 225 Stock Average added 1.2 percent to 14,897.63. The yen declined 0.7 percent to 102.21 versus the dollar yesterday, the most since Jan. 14.

“There was concern that if Russia used military force against Ukraine, oil prices would jump and negatively affect the bright outlook for the global economy,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s second-biggest lender by market value. “The prospect of military force has gone for now, and nerves have been calmed. Risk aversion is receding.”

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The measure yesterday rebounded to a record following its biggest loss in a month as comments from Putin signaled the Ukraine crisis won’t immediately escalate.

Ukraine Situation

Putin said yesterday that he’s not considering taking control of the Black Sea region of Crimea and would send troops into Ukraine only in extreme circumstances.

Putin’s troop buildup in Crimea triggered Russia’s biggest stock selloff in five years March 3 and pulled the ruble to a record low, prompting the central bank to raise interest rates the most since 1998, when a cash-strapped government stumbled toward default.

Honda gained 1.3 percent to 3,732 yen. Sony Corp., which gets about 70 percent of its revenue outside of Japan, added 2.1 percent to 1,783 yen. Sharp Corp., which makes more than half its sales abroad, gained 1.3 percent to 320 yen.

“As well as the yen impact, risk-off sentiment generally has also receded, and that’s helping Japanese shares today,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd. “But we still don’t know what will happen with Ukraine, so that’s an overhang on the market.”

Fujitsu advanced 3.6 percent to 634 yen, the biggest advance since Feb. 6. UBS raised its investment rating on the stock to buy from neutral and also raised its target price to 780 yen from 550 yen.

Developers Climb

The Topix Real Estate index advanced the most among the broader gauge’s 33 industry groups, capping a 6.2 percent two-day advance. The measure had fallen 5.5 percent over the four days through March 3.

Among stocks that fell, Fuji Heavy lost 1.8 percent to 2,685 yen, the second-biggest decline on the Nikkei 225. The manufacturer cut its net-income forecast to 192 billion yen, below the 225.8 billion yen analyst estimate.

The Topix (TPX) fell 6.9 percent this year, the biggest drop among major developed markets, according to data compiled by Bloomberg. The gauge traded at 1.19 times book value today, compared with 2.62 for the S&P 500 and 1.89 for the Stoxx Europe 600 Index yesterday. Volume on the Japanese gauge was 24 percent below the 30-day average.

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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