Most Japan Stocks Rise Even After Fast Retailing Plunges

Most Japan shares rose even after Softbank Corp. and Fast Retailing Co. fell the most in more than a year, dragging the Nikkei 225 Stock Average to a fourth straight loss. Automakers gained after China and Japan agreed to hold talks over a territorial dispute.

Nissan Motor Co., the leading Japanese carmaker in China, rose 1.5 percent. Canon Inc., a camera manufacturer that gets 27 percent of sales in the Americas, gained 2.3 percent after U.S. jobless claims fell more than expected. Softbank, Japan’s third-largest mobile-phone company, plummeted 17 percent on a report it may invest in loss-making Sprint Nextel Corp. Fast Retailing plunged 9.9 percent after its profit forecast missed estimates.

The Topix Index added 0.6 percent to 718.32 at the close of trading in Tokyo, with 28 of its 33 industry groups gaining. The Nikkei 225 slid 0.2 percent to 8,534.12 after rising as much as 0.9 percent. The gauge dropped 3.7 percent this week, capping a four-week decline.

“The market is rebounding after it fell a good amount without many decisive factors,” said Isao Kubo, a Tokyo-based equity strategist at Nissay Asset Management Corp., which oversees about 5 trillion yen ($64 billion). The diplomatic dispute “is weighing on China as much as on Japan. I think the both sides will try to seek some form of compromise.”

The Topix dropped 1.4 percent this year as a slowdown in the global economy boosted demand for the yen as a haven and as a territorial dispute with China saw Japanese production there disrupted, weighing on earnings. Policy makers in Asia, the U.S. and Europe have introduced a series of stimulus measures to support growth.

Stock Valuations

Shares on the Topix trade at about 0.86 times book value, compared with 2.22 for the Standard & Poor’s 500 Index and 1.51 times for the Stoxx Europe 600 Index. A number lower than one means a company can be bought for less than the value of its assets.

Japan and China agreed to talks aimed at reducing tensions over a dispute over a group of islands. Officials from both countries agreed to hold vice-ministerial level discussions at an unspecified date, Japan’s Foreign Ministry said last night.

Carmakers whose production in China was disrupted amid anti-Japanese protests gained. Nissan added 1.5 percent to 666 yen. Honda Motor Co. gained 0.8 percent to 2,338 yen, while Toyota Motor Corp. rose 1.1 percent to 2,934 yen.

Futures on the S&P 500 rose 0.2 percent today after the index closed little changed in New York yesterday. Labor Department figures showed first-time applications for jobless benefits dropped 30,000 to 339,000 last week, the fewest since February 2008. Economists forecast 370,000 claims, according to a Bloomberg survey.

Softbank Slumps

Softbank dropped 17 percent to 2,395 yen, its biggest decline since 1998. The mobile-phone carrier is seeking control of Overland Park, Kansas-based Sprint, according to two people familiar with the matter. CLSA called the possible acquisition “a cause for concern,” citing difficulties in returning the U.S. company to profit.

Fast Retailing plunged 9.9 percent to 16,040 yen, its biggest loss since March 2011. The apparel maker plunged after it forecast annual profit below analyst estimates as a slowdown in global economic growth reduces consumer spending.

Softbank and Fast Retailing had the biggest declines on the Nikkei 225. Without their losses, the gauge would have risen 1.4 percent today, according to data compiled by Bloomberg.

The Nikkei Stock Average Volatility Index dropped 8.3 percent to 17.77, indicating traders expect a swing of about 5.1 percent on the benchmark gauge over the next 30 days. Trading volume on the Nikkei 225 was 15 percent above the 30-day average.

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