Topix Caps Biggest Weekly Loss Since December on Kuroda Comments

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Japan’s Topix index fell, capping its biggest weekly drop in more than four months, after Bank of Japan Governor Haruhiko Kuroda said no further easing of monetary policy is needed at this time.

Mitsui OSK Lines Ltd. and Sony Corp. slipped after their profit forecasts missed estimates. Fujitsu Ltd. posted a record drop after its net-income target disappointed analysts. Toilet maker Toto Ltd. added 7.9 percent to lead gains on the Nikkei 225 Stock Average after boosting its dividends.

The Topix dropped 0.5 percent to 1,585.61 at the close in Tokyo, capping a 2.1 percent loss this week. The measure advanced 3.2 percent in April for its fourth straight monthly increase. The Nikkei 225 climbed less than 0.1 percent to 19,531.63, erasing earlier declines and paring this week’s drop to 2.4 percent.

“There was concern about the recent strength in stock prices,” said Akio Yoshino, chief economist in Tokyo at Amundi Japan Ltd., which oversees about 3.74 trillion yen ($31.28 billion). “A lot of company forecasts aren’t as strong as expected, so there’s profit taking going on, too. Also a lot of investors had hopes for additional easing from the BOJ.”

Japan’s central bank refrained on Thursday from boosting stimulus, keeping a plan to expand the monetary base at an 80 trillion yen ($672 billion) annual pace and lowered its inflation and growth forecasts.

Inflation Outlook

“It’s true that the outlook for reaching the price target has been delayed -- from around fiscal 2015 to around the first half of fiscal 2016,” Kuroda told reporters after markets closed on Thursday. “But the trend of prices is steadily improving and expected to keep doing so. Considering that, I don’t think we need additional stimulus at this stage.”

The BOJ on Thursday cut its forecast for fiscal 2015 core consumer price gains to 0.8 percent from a January estimate of 1 percent and said it expects to reach 2 percent inflation around the first half of fiscal 2016.

Stripped of the effect of a sales-tax increase last April, core inflation -- the central bank’s key measure -- was 0.2 percent after touching zero in February, data showed Friday.

“Some had expected additional easing in Japan, but that’s been negated,” Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo, said phone.“The 2 percent inflation target has been pushed back two years, although the stance that it’s achievable has been retained.”

Earnings Season

E-mini futures on the Standard & Poor’s 500 Index added 0.3 percent after the underlying gauge fell 1 percent in New York on Thursday, paring a monthly gain.

About 330 Topix-listed companies report results this week, according to data compiled by Bloomberg. So far this quarter, 52 percent of 176 companies have posted a negative earnings surprise, according to the data.

Mitsui OSK slumped 3.1 percent after forecasting profit of 43 billion yen for the current fiscal year, missing analyst estimates for 50.4 billion yen. CLSA Ltd. cut its rating on the shipping line to underperform.

Sony slid 0.4 percent after projecting net income of 140 billion yen this year compared with analyst estimates for 189.9 billion yen.

Fujitsu, Toto

Fujitsu tumbled 18 percent after forecasting profit will drop on costs to shift away from the hardware business and as a weaker euro erodes earnings.

Toto jumped 7.9 percent, its highest close since 1994, after saying it plans to pay a dividend of 28 yen per share, up from 26 yen a share in the fiscal year just ended.

(The headline in an earlier version of the story was corrected to amend the spelling of a name.)

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