Most Japanese shares fell, with the Topix index dropping for a second day, as paper and electronics makers led losses among the gauge’s 33 subsectors.
Hokuetsu Kishu Paper Co. slid 2.3 percent as the sector posted the biggest decline on the Topix. Chiyoda Co., which operates shoe stores, sank 8.4 percent after reporting a decline in first-quarter profit. Photocreate Co. surged 144 percent from its initial public offering price after the photographic-service provider went untraded on its debut yesterday. Developers and energy explorers climbed the most on the gauge.
The Topix fell less than 0.1 percent to 1,194.77 at the close in Tokyo after swinging between a 0.2 percent gain and a 1.2 percent loss. Volume was 15 percent below the 30-day average. The index gained 4.8 percent last week, bringing its increase over three weeks to more than 12 percent, the most since April 2009. The Nikkei 225 Stock Average added 0.4 percent to 14,472.58.
“There’s no clear direction in the market at all,” said Isao Kubo, a Tokyo-based equity strategist at Nissay Asset Management Corp., which oversees about $61 billion. “I think you can be bullish on the Japanese market, but shares have risen fast recently and investors may be being cautious.”
After plunging as much as 18 percent from a May 22 high, the Topix has rebounded amid optimism Prime Minister Shinzo Abe will push through economic reforms following elections on July 21. Investors today weighed a Bank of Japan policy decision and economic upgrade, comments from Federal Reserve Chairman Ben S. Bernanke, a strengthening yen and surging machinery orders.
The BOJ today stuck with a pledge to expand the monetary base by 60 to 70 trillion yen ($710 billion) per year, in line with the forecasts of all 20 economists surveyed by Bloomberg News, a statement today showed. The bank raised its assessment of the economy, referring to a “recovery” for the first time since before the 2011 earthquake.
“The BOJ decision was within market expectations,” said Takahiro Nakano, a Tokyo-based senior strategist at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank by market value. “Upgrading the economic outlook met the market consensus, too.”
Futures on the Standard & Poor’s 500 Index gained 1 percent today. The gauge closed little changed yesterday as investors analyzed minutes from the Federal Reserve’s last meeting for signs of when the central bank might slow the pace of stimulus.
Fed Chairman Bernanke yesterday called for maintaining loose policy, which pushed the dollar down against its peers. The yen gained 0.7 percent to 99.03 against the greenback as of 4:08 p.m. in Tokyo after rising 1.5 percent yesterday.
Companies that do business in the U.S. were mixed. Honda Motor Co., a carmaker that gets 47 percent of revenue in North America, dropped 0.5 percent to 3,790 yen. Mazda Motor Corp., an automaker that relies on the region for 30 percent of sales, added 0.2 percent to 436 yen.
Japan’s machinery orders rose 10.5 percent in May from April, the Cabinet Office said today, topping the 1.9 percent gain estimated by 29 economists surveyed by Bloomberg. Machinery orders are an indicator of capital spending.
Data released today showed foreigners bought the most Japanese stocks in seven weeks. It’s the third straight week of net purchases, the longest streak since April 12.
The Topix Pulp & Paper Index fell 0.9 percent, halting a five-day rally. Hokuetsu Kishu, Japan’s third-largest paper company by market value, dropped 2.3 percent to 426 yen. Daio Paper Corp., the fourth-biggest, lost 2.1 percent to 604 yen.
Chiyoda slumped 8.4 percent to 2,405 yen, the most since October 2008, after the footwear retailer said its quarterly net income dropped 7.6 percent to 2.2 billion yen.
Photocreate, which provides photography services for sports events, festivals and concerts, jumped 144 percent to 4,070 yen on the Tokyo Stock Exchange Mothers market.
The Topix traded at 1.27 times book value today, compared with 2.44 times for the S&P 500 and 1.66 times for the Stoxx Europe 600 Index yesterday. The gauge’s 30-day historic volatility was at 34.95 today, retreating from its July 2 high of 43.22.