Japanese Stocks Rise as Buyback Plans Lift Topix; Nikon Plunges

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Japan stocks rose after U.S. shares climbed to records as companies including Dentsu Inc., Dai Nippon Printing Co. and Marui Group Co. said they’ll buy back shares.

Dentsu surged 14 percent, Dai Nippon Printing gained 2.4 percent and Marui added 5.2 percent. Mitsubishi UFJ Financial Group Inc. gained 3.3 percent after a report the country’s biggest lender will buy back shares. Nikon Corp. tumbled 11 percent after slashing its operating-profit target, while Sharp Corp. dropped 7 percent after saying it would cut 10 percent of its global workforce.

The Topix added 1 percent to 1,607.11 at the close of trading in Tokyo, up 1.2 percent this week. Volume on the measure today was about 11 percent above the 30-day average, with about twice the number of shares rising as falling. The Nikkei 225 Stock Average climbed 0.8 percent to 19,732.92. The Standard & Poor’s 500 Index closed at an all-time high Thursday as a weaker dollar boosted multinational companies.

“Companies giving back to shareholders through moves like share buybacks and boosting dividends has increased,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd. “That’s supportive for the market.”

E-mini futures on the S&P 500 climbed 0.2 percent today. The underlying equity measure advanced 1.1 percent Thursday, halting a three-day slide, as Microsoft Corp. and Apple Inc. advanced. Treasuries gained after a measure of inflation unexpectedly declined, calling into question how soon the Federal Reserve will be able to raise interest rates.

Earnings Season

Mizuho Financial Group Inc., Takeda Pharmaceutical Co. and Sanrio Co. are among companies reporting earnings Friday in Tokyo. Of the Topix members that have posted results this season and for which Bloomberg had estimates, 48 percent have posted better-than-expected profits, down from 67 percent in the previous period. Some 55 percent beat revenue estimates, up from 53 percent.

Dentsu jumped 14 percent, its biggest gain since 2008 and its highest close on record, after the advertising agency said it will buy back as much as 20 billion ($168 million) of shares and pay a dividend of 55 yen a share, up from its previous forecast of 40 yen. The company also reported 79.8 billion yen in profit for the fiscal year ended March, beating its outlook.

Dai Nippon Printing gained 2.4 percent after saying it will repurchase as much as 2.8 percent of its shares. Department store operator Marui increased 5.2 percent after saying it plans to buy back about 6.5 percent of its stock.

Mitsubishi UFJ added 3.3 percent, the biggest boost to the Topix, after the Nikkei newspaper reported the lender plans to buy back 100 billion yen of stock.

Nikon, Sharp

Nikon plunged 11 percent, the most since August 2013 and the biggest drop on the Nikkei 225. The camera maker forecast 30 billion yen in operating profit for the year ending March, missing the 49.8 billion yen estimate of analysts. The company also slashed its 2017 operating-profit target to 38 billion yen, down from 110 billion yen in June.

Sharp tumbled 7 percent to 186 yen, its lowest close since 2012. The company said it plans to pare its global workforce 10 percent and take another lifeline from lenders as it sells its headquarters, exits markets and shrinks its solar business.

“Sharp’s management plan is wishful thinking, just as it was about earnings in the last fiscal year,” Makoto Kikuchi, chief executive officer of Myojo Asset Management, said Thursday.

Morgan Stanley cut its rating on Sharp to underweight, while UBS Group AG reduced its share-price target for the display maker to 40 yen from 170 yen.

(The second paragraph in an earlier version of this story was amended to correct Sharp’s price change and job cut percentage.)

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