Japan’s Topix index rose a second day, with the gauge closing at a five-week high, as investors assessed corporate earnings and developers advanced.
The Topix Real Estate Index climbed 2.1 percent to lead gains among the 33 industry groups. Kubota Corp., which makes tractors and combine harvesters, jumped 5.9 percent after net income and the company’s profit forecast beat estimates. Dwango Co. and Kadokawa Corp. each surged at least 9 percent after a report they will merge. Nikon Corp. posted its lowest close in three years after the camera maker’s net income for the last fiscal year and profit outlook missed estimates.
The Topix added 0.4 percent to 1,183.15 in Tokyo, its highest close since April 7. About five shares rose for every three that slid. The measure jumped 1.8 percent yesterday, the largest advance since April 16. The Nikkei 225 Stock Average lost 0.1 percent today to 14,405.76. The yen gained 0.1 percent to 102.13 per dollar after weakening for a third day yesterday.
“As we near the end of earnings season, I’m hoping that volatility subsides and we can start to get more of a direction for stocks,” said Takashi Aoki, who helps oversee the equivalent of $37.6 billion at Mizuho Asset Management Co. in Tokyo. “There was a lot of concern that company forecasts would be conservative, but that has mostly been priced in, so the risks are receding.”
More than 650 companies on the Topix are scheduled to post results this week. Of members that reported from April 1 through yesterday and for which Bloomberg had estimates, 56 percent beat analyst expectations for profit.
Sumitomo Realty & Development Co. gained 4.1 percent to 4,315 yen, providing the biggest boost to the Topix Real Estate Index. The developer forecast an 11 percent increase in profit to 77 billion yen ($754 million), topping estimates for 74.4 billion yen. Mitsubishi Estate Co. climbed 2.2 percent to 2,501 yen, while Mitsui Fudosan Co. added 1 percent to 3,306 yen.
Kubota jumped 5.9 percent to 1,420 yen, its largest advance since November. The company said full-year net income surged 69 percent to 131.7 billion yen, beating analysts’ estimates for 126.4 billion yen. Net income for the current fiscal year will be 130 billion yen, Kubota projected, compared to analyst predictions for 128.8 billion yen.
The Topix Banks Index slipped 0.3 percent ahead of earnings announcements by the country’s biggest lenders.
Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., Japan’s two largest banks, each lost 0.7 percent, falling to 574 yen and 4,185 yen, respectively. Mizuho Financial Group Inc. climbed 0.5 percent to 204 yen.
Yokogawa Electric Corp. plunged 8.9 percent to 1,258 yen after the producer of electronic components released a net-income outlook that missed analyst predictions.
Dentsu Inc., an advertising agency, tumbled 3.9 percent to 3,925 yen after projecting a 20 percent drop in profit.
Nikon sank 4 percent to 1,567 yen, its lowest close since March 2011. The company announced net income of 46.8 billion yen for last fiscal year, missing its own forecast of 50 billion yen. Nikon projected profit of 45 billion yen for the current year, while analysts estimated 48.5 billion yen.
Sony Corp. gained 1.1 percent today before releasing its earnings results after the market close. The consumer-electronics maker unexpectedly forecast an annual loss of 50 billion yen for the year ending March, compared with average analyst projections for 57.1 billion yen in profit.
“You need to look at the trees rather than the forest,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “Investors will continue watching earnings results while keeping an eye on movements in the yen.”
Dwango, which provides content through mobile phones and operates the Niconico video-delivery website, jumped 9 percent to 2,798 yen. Kadokawa, which publishes books and produces movies, videos and game software, surged 10 percent to 3,465 yen. The two companies will merge under a holding company in October, according to a statement to the Tokyo Stock Exchange after the market close today. The Nikkei newspaper had earlier reported the plan, without citing anyone.
Futures on the Standard & Poor’s 500 Index added less than 0.1 percent today. The equity gauge closed little changed at a record high yesterday. The Dow Jones Industrial Average also extended its all-time high, gaining for a fifth day to cap its longest rally this year.
The Topix traded at 1.15 times book value today, compared with 2.65 for the S&P 500 and 1.91 for the Stoxx Europe 600 Index yesterday.