Topix Gains as Exporters Advance, Nippon Suisan Jumps

Japan’s Topix (TPX) index advanced for a sixth day, with the measure poised for its first monthly gain this year, as exporters and fishing stocks climbed.

Toyota Motor Corp., the world’s biggest carmaker, gained 0.9 percent even as the yen strengthened. Nippon Suisan Kaisha Ltd. posted its highest close in five years, leading gains on a Topix gauge tracking fishery stocks, after SMBC Nikko Securities Inc. boosted its rating on the seafood-product maker. Credit Saison Co. lost 1.4 percent after Credit Suisse Group AG cut its target price for the consumer lender.

The Topix climbed 0.2 percent to 1,200.68 at the close of trading in Tokyo after falling as much as 0.4 percent in the morning session. The measure rose 4.2 percent in the previous five days and is up 3.3 percent in May, poised for its first monthly advance since December. The Nikkei 225 added 0.1 percent today to 14,681.72.

“There was some backlash after shares rose sharply over the past five days,” said Akio Yoshino, chief economist in Tokyo at Amundi Japan Ltd., which oversees the equivalent of $32.1 billion. “But valuations for Japanese shares are low, so that’s supporting the market.”

The Japanese gauge traded at 1.17 times book value today, compared with 2.66 for the Standard & Poor’s 500 Index and 1.90 for the Stoxx Europe 600 Index yesterday. Volume on the Topix was in line with the 30-day average.

Exporters Gain

The Topix closed 0.2 percent below its 100-day moving average today. A rise above the level would signal to some traders that the index is poised to gain further.

Automakers and consumer electronic producers provided the biggest boost to the market as the 120-day correlation between the Topix and the greenback’s move against the yen held near the lowest since April 2012. The yen strengthened 0.1 percent to 101.70 per dollar today.

The changing relationship between the Topix and Japan’s currency is because the link between the U.S. stock market and Treasury yields is weakening, Barclays Plc analyst Hajime Kitano wrote in a note today.

Toyota increased 0.9 percent to 5,663 yen, the largest single support to the Topix. Nissan Motor Co. gained 2.1 percent to 927 yen. Panasonic Corp. climbed 1.2 percent to 1,096 yen.

Nippon Suisan jumped 10 percent to 324 yen for the biggest advance on the Nikkei 225. (NKY) The company posted its highest close since October 2008. SMBC Nikko raised its rating to outperform from neutral, while also increasing its target price to 370 yen from 240 yen.

Credit Saison

Credit Saison sank 1.4 percent to 1,898 yen. Credit Suisse analysts led by Takehito Yamanaka cut their target price for the consumer lender to 1,800 yen from 2,480 yen, citing higher costs and the need to see signs profit will rise for shares to gain. The stock is down 31 percent this year.

Monetary easing and government spending drove a world-beating 51 percent jump for the Topix in 2013. The index fell 7.8 percent this year, the most among 24 developed markets tracked by Bloomberg, amid concern the measures won’t be enough to revive the economy.

Japanese retail sales tumbled 13.7 percent in April compared with the previous month, data showed today. Economists surveyed by Bloomberg had expected an 11.7 percent decline. The drop in sales follows a consumer splurge in March ahead of a 3 percentage point tax increase on April 1. The government is set to announce a revised package of growth plans in June.

“The energy behind the rebound has gone and investors are taking profit,” said Mitsushige Akino, Tokyo-based executive officer at Ichiyoshi Asset Management Co. “We’re waiting for the government’s growth strategies. Until then, investors wanting to sell can’t fully offload their shares.”

Futures on the S&P 500 climbed 0.1 percent today. The measure fell yesterday after a four-day rally drove it to a record, as losses among retailers overshadowed gains in phone shares and utilities before a report today that may show the U.S. economy contracted in the first quarter.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

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

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