Japan’s Topix Rises to Highest Since March on Weaker Yen

Japan’s Topix index gained, posting its highest close since March, after the yen fell the most in two months yesterday and U.S. stocks extended records.

Nomura Holdings Inc. increased 0.9 percent as brokerages rose the most among the 33 Topix (TPX) industry groups. Seibu Holdings Inc. climbed 2.1 percent after Nomura said the railway and hotel operator is redeveloping a plot of land in an area at the site of a new train station in central Tokyo. Daio Paper Corp. sank 7.1 percent on saying it will sell shares.

The Topix gained 0.7 percent to 1,228.59 in Tokyo, rising for a ninth day and capping its highest close since March 11. The Nikkei 225 Stock Average added 0.7 percent to 15,034.25, while the TSE Mothers Index of smaller companies rallied for an 11th day, its longest winning streak on record. The yen held at 102.37 per dollar after sliding 0.6 percent yesterday. Shares also rose on a report the chairman of the Government Pension Investment Fund’s investment committee doesn’t see a 20 percent allocation to Japanese equities as too much.

“If U.S. rates begin to rise on the back of good economic data, then Japanese equities should catch up as the yen weakens,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. “The fact that GPIF might raise domestic stocks to above the current level of 17 percent is also being taken positively.”

U.S. Shares

Futures on the Standard & Poor’s 500 Index slipped 0.1 percent. The measure climbed to a record yesterday, after erasing an early loss, as the Institute for Supply Management twice corrected the reading for its May manufacturing index. The Dow Jones Industrial Average also extended an all-time high.

The Topix Securities Index advanced 1.6 percent, the most among the broader gauge’s sectors. Nomura gained 0.9 percent to 683 yen. Daiwa Securities Group Inc., Japan’s second-largest brokerage, climbed 1.9 percent to 856 yen.

Seibu added 2.1 percent to 2,232 yen after Nomura said the company is probably finalizing plans to redevelop a large plot of land it owns in the Shinagawa-Takanawa area of Tokyo. JR East Railway Co. confirmed earlier media reports that a station will be built in that part of the city in time for the 2020 Olympics. JR East climbed 0.7 percent to 7,902 yen.

Daio Paper slumped 7.1 percent to 1,089 yen, the most since November 2011. The company said it plans to raise 22.4 billion yen ($219 million) by selling shares to the public and to Hokuetsu Kishu Paper Co. Hokuetsu slid 0.6 percent to 500 yen.

Monetary easing and government spending drove a world-beating 51 percent jump for the Topix in 2013. The index fell 5.7 percent this year, the most among 24 developed markets tracked by Bloomberg, amid concern the measures won’t be enough to revive the economy.

The Japanese gauge traded at 1.20 times book value today compared with 2.68 for the S&P 500 and 1.91 for the Stoxx Europe 600 Index yesterday. Volume on the Topix was about 17 percent higher than the 30-day average today.

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

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