Topix Rises After Yen Weakens as Ukraine Tensions Recede

Japanese shares rose in thin trading, with the Topix (TPX) index capping its biggest weekly gain this month, after the yen fell yesterday as tensions in Ukraine eased and amid optimism about U.S. earnings.

Toyota Motor Corp. contributed the most to the Topix’s advance as the world’s biggest auto manufacturer added 0.9 percent. Casio Computer Co. jumped 5 percent on a report the consumer-electronics maker’s president said the company is aiming for record operating profit. Takaoka Toko Co., which develops electrical equipment for the power industry, slumped 7.2 percent after saying preliminary full-year profit was less than half its forecast.

The Topix gained 0.6 percent to 1,173.37 at the close in Tokyo, with more than twice the number of shares rising as falling. The measure closed the week 3.5 percent higher, the biggest such gain since the period ended March 28. The Nikkei 225 Stock Average added 0.7 percent today to 14,516.27. The yen held at 102.40 per dollar after falling 0.2 percent yesterday.

“A calming of the situation in the Ukraine is positive for stocks,” said Juichi Wako, a Tokyo-based equity strategist at Nomura Holdings Inc., the nation’s biggest brokerage. “With Ukraine concerns receding, the dollar gets bought and the yen weakens, so of course that’s positive for today.”

Equity markets including the U.S., Australia, Hong Kong and Singapore were closed today for a holiday. Volume on the Topix was 43 percent lower than the 30-day average. Some 1.24 billion shares changed hands today on the Topix’s first section, the fewest since August 2012. Turnover of 1.15 trillion yen was the lowest since December 2012, at 1.15 trillion yen.

“It’s hard to say how much momentum there is in buying today as overseas markets are closed,” Wako said. “There’s a chance the market will head downward on profit-taking.”

U.S. Earnings

The Standard & Poor’s 500 Index rose 0.1 percent yesterday in New York to cap its best week since July as earnings from General Electric Co. and Morgan Stanley beat estimates.

Four-way talks on the crisis in Ukraine ended with an accord aimed at taking the first steps toward calming the conflict after Russian President Vladimir Putin said he hopes he won’t have to send troops.

“The Geneva meeting on the situation in Ukraine agreed on initial concrete steps to de-escalate tensions and restore security for all citizens,” Russian Foreign Minister Sergei Lavrov, his Ukrainian counterpart, Andriy Deshchytsia, U.S. Secretary of State John Kerry and Catherine Ashton, the European Union’s foreign-policy chief said in a joint statement. “All sides must refrain from any violence, intimidation or provocative actions.”

Exporters

Japan’s currency is headed for its biggest weekly loss against the dollar since the period ended March 21 after rising last week. Toyota gained 0.9 percent to 5,564 yen. Sony Corp. added 1.3 percent to 1,932 yen.

Casio Computer gained 5 percent to 1,225 yen, the most since Jan. 29. The company is aiming for a record operating profit of about 60 billion yen ($586 million) and sales for fiscal year 2015 will rise to 400 billion yen, the Nikkei newspaper reported President Kazuo Kashio as saying.

“It’s all about the yen today,” said Naoki Fujiwara, the Tokyo-based chief fund manager at Shinkin Asset Management Co. “However, as overseas markets are closed and we’re heading into the weekend, it’s not a day to take an investment position. I’d rather hold and see.”

Economic Assessment

Japan’s Cabinet Office yesterday cut its economic view for the first time since Shinzo Abe came to power in 2012 after the national sales tax was raised 3 percentage points to 8 percent at the start of this month.

“The downgrade reflects cuts in the assessment of private consumption, housing construction, imports and industrial production,” a government official said.

Takaoka slumped 7.2 percent to 1,635 yen, the second-biggest drop on the Topix. The company said preliminary net income would be 600 million yen, missing its 1.27 billion yen forecast for the year ended March 31.

The Topix is down 10 percent this year, the steepest drop among 24 developed markets tracked by Bloomberg. The Japanese equity gauge traded at 1.15 times book value today, compared with 2.6 for the S&P 500 and 1.87 for the Stoxx Europe 600 Index yesterday.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Yuko Takeo in Tokyo at ytakeo2@bloomberg.net

To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net Jim Powell, Tom Redmond

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