Energy-explorer Inpex Corp. jumped 4.5 percent. Advantest Corp., a maker of semiconductor testing devices, gained 3.6 percent on a report that it plans to raise its operating-profit margin this fiscal year. A gauge tracking airline shares slid 1.9 percent for the biggest decline among the Topix’s 33 industry groups.
The Topix added 0.5 percent to 1,243.97 at the close in Tokyo after falling as much as 0.8 percent. The measure added 0.8 percent this week. The Nikkei 225 Stock Average increased 0.8 percent to 15,097.84. The Bank of Japan announced today it is maintaining record stimulus. The yen slid 0.4 percent to 102.06 per dollar.
“There was a selloff after the yen strengthened on overseas news, but that didn’t last because general conditions have improved for Japanese shares,” said Toshiyuki Kanayama, Tokyo-based senior market analyst at Monex Inc. “The market will remain resilient unless the Iraqi situation gets out of control.”
The strife in Iraq, three years after U.S. troops withdrew, has raised the prospect of a return to sectarian civil war in OPEC’s second-biggest oil producer. Security forces sought to check the rapid advance of Islamist militants who had seized major cities, as Prime Minister Nouri al-Maliki responded to the greatest threat to his government since taking power.
West Texas Intermediate crude headed for the biggest weekly advance this year as violence in Iraq threatened supplies from OPEC’s second-largest oil producer.
A Topix gauge of energy explorers posted the biggest gain in two months. Inpex soared 4.5 percent to 1,635 yen. Japan Drilling Co. surged 5.1 percent to 5,160 yen.
Advantest added 3.6 percent to 1,253 yen after the Nikkei newspaper reported it will probably raise its operating profit margin to 10 percent from 7 percent for the year ending March 2015 on rising orders for chip-testing equipment.
Dowa Holdings Co. advanced 1.9 percent to 959 yen after Credit Suisse Group AG raised its rating on the metals refiner to neutral from underperform.
The Topix Air Transportation Index lost 1.9 percent, the biggest drop since March 14. Japan Airlines Co. fell 2.9 percent to 5,280 yen. ANA Holdings Inc. slid 0.9 percent to 231 yen.
Futures on the Standard & Poor’s 500 Index gained 0.1 percent today after the equity measure declined 0.7 percent yesterday. U.S. retail sales rose 0.3 percent in May, missing estimates for a 0.6 percent gain in a Bloomberg survey, after a three-month surge in shopping. The gain followed a revised 0.5 percent advance in April that was larger than previously estimated, Commerce Department figures showed.
Even after a 8.2 percent rebound from its May 21 low, the Topix is still the worst performer this year among 24 developed markets tracked by Bloomberg. The measure capped a world-beating rally last year as the BOJ pressed ahead with record monetary easing.
The central bank today kept intact its policy of expanding the monetary base at a pace of 60 trillion yen to 70 trillion yen ($686 billion) per year. A rebound in consumer sentiment and signs of strength in business investment indicate the world’s third-biggest economy is weathering a higher sales tax.
Shares fell earlier. The 25-day Toraku Index, which compares the numbers of advancing and declining stocks on the Topix, stayed above 120 the past two days, a level that signals to some investors that shares have climbed too far, too fast.
“The market continues to take a breather amid technical signs of overheating,” said Kenichi Kubo, a senior fund manager at Tokio Marine Asset Management Co. “There’s no reason for the BOJ to add to stimulus as the impact of the sales tax increase is fading.”
The Topix traded at 1.2 times book value today, compared with 2.7 for the S&P 500 and 1.9 for the Stoxx Europe 600 Index yesterday.
(An earlier version of this story was corrected to show that Honda gets almost half its revenue from North America, not overseas, and to remove the second reference to the carmaker.)