Japanese stocks fell for a second day, reversing earlier gains, as rubber-product manufacturers and builders led declines and the yen erased losses against the dollar. The Bank of Japan kept monetary policy unchanged.
Toyota Motor Corp., Asia’s biggest carmaker, fell 1.1 percent after rising as much as 1.4 percent. Sumitomo Rubber Industries Ltd., Japan’s No. 2 tiremaker, slumped 6.7 percent after net income dropped. JGC Corp., which constructs industrial facilities, led declines on the Nikkei 225 Stock Average after operating profit dropped. Kubota Corp., a producer of agricultural machinery, gained 1.6 percent after beating estimates for profit and sales.
The Topix fell 1.4 percent to 1,139.59 at the close in Tokyo after rising as much as 1 percent. Just two of 33 groups climbed on the gauge. The Nikkei 225 lost 1.6 percent to 13,605.56, erasing a 1.5 percent advance. The central bank maintained its plan to boost the monetary base and continue easing until reaching a stable 2 percent inflation rate.
“Trading is thin during the summer-vacation period and people are selling to take profits,” said Ichiro Yamada, general manager of equities who helps oversee the equivalent of $3.1 billion at Fukoku Mutual Life Insurance Co. “I don’t think the market is moving on Japan’s policy measures right now.”
Trading volume was 13 percent below the Topix’s 30-day average today. The measure rose 33 percent this year as of yesterday, leading gains among developed markets, amid optimism that the record BOJ stimulus and Prime Minister Shinzo Abe’s reforms will boost growth.
Shares dropped as the yen erased losses against the dollar. A stronger Japanese currency cuts the value of overseas earnings at exporters. Toyota lost 1.1 percent to 6,160 yen and Sony Corp., an electronics maker that gets 16 percent of its sales in the U.S., declined 1.3 percent to 1,927 yen.
Of the 227 companies on the Topix that have posted quarterly results and for which Bloomberg had estimates, 61 percent beat projections.
Sumitomo Rubber slumped 6.7 percent to 1,570 yen after first-half net income fell 5.7 percent to 15.5 billion yen ($161 million). The Topix Rubber Products Index fell the most among the 33 subgroups on the broader equity gauge. Bridgestone Corp., Asia’s biggest tiremaker, lost 3.9 to 3,365 yen.
JGC plunged 7.9 percent to 3,275 yen, leading builders’ lower after quarterly operating profit slid 3.9 percent to 15.3 billion. The Topix Construction Index declined 2.3 percent. Kubota added 1.6 percent to 1,427 yen after first quarter operating profit jumped 50 percent and sales surged 31 percent.
Futures on the Standard & Poor’s 500 Index gained 0.3 percent today. The gauge fell 0.4 percent yesterday amid growing speculation the Federal Reserve will pare bond purchases this year as the U.S. economy strengthens.
The Topix traded at 1.19 times book value today, compared with 2.48 for the S&P 500 and 1.69 for the Stoxx Europe 600 Index yesterday. The Nikkei Stock Average Volatility Index rose 6.6 percent to 31.18, indicating traders expect an 8.9 percent swing on the equity gauge in the next 30 days.