Japan’s Topix Index Rises Eighth Day to Extend 7 1/2-Year High

Updated on

Japanese shares rose amid low trading volume, with the Topix index climbing for an eighth day to extend its highest closing level since 2007.

JFE Holdings Inc. jumped 4.5 percent, leading iron and steel companies to the largest gain among the 33 Topix industry groups. Nippon Paper Industries Co. climbed 3.5 percent after announcing a target to double operating profit in three years. Nomura Holdings Inc. fell a second day as brokerages led declines.

The Topix index added less than 0.1 percent to 1,659.57 at the close in in Tokyo, capping its longest stretch of gains in almost a year. Volume was about 19 percent below the 30-day average. The Nikkei 225 Stock Average advanced 0.1 percent to 20,437.48, extending a 15-year high. U.S. cash-equity markets were closed Monday for the Memorial Day holiday. The yen fell 0.3 percent to 121.93 per dollar.

“I still see the Japanese market as vulnerable to a correction but it continues to be a market you want to buy on the dips,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages about $124 billion, said by phone. “You have very strong liquidity support, you have strong momentum in earnings growth and economic indicators, and valuations are not too demanding.”

The nation’s exports rose more than forecast in April, a report showed Monday, after data last week indicated gross domestic product expanded for a second quarter. The Topix, which has climbed 18 percent this year, traded at 16.1 times estimated earnings at the close, compared with 18 times for the Standard & Poor’s 500 Index on Friday.

Greek Impasse

Greek officials will use Tuesday to revive their bid to access financial aid with their finance minister, Yanis Varoufakis, blaming creditors’ insistence on more austerity for the impasse.

While Greek Prime Minister Alexis Tsipras’s spokesman Gabriel Sakellaridis said Monday that a deal can be reached by the end of May, he admitted that disagreements remain in areas such as budget targets, sales-tax rates, pension and labor market rules.

“We’ll continue to have instances where problems surrounding U.S. monetary policy and Greece will drag on the market,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo, said by phone. “In terms of what can weigh on the market, they stand out.”

Suntory Beverage & Food Ltd., which sells PepsiCo Inc. drinks in Asia, slipped 1.7 percent after saying it will buy Japan Tobacco Inc.’s vending machines for about 150 billion yen ($1.2 billion). Japan Tobacco Inc. slipped 0.1 percent.

Tomy Co. dropped 3.2 percent after Marunouchi Capital Co., one of its largest shareholders, severed its relationship with the toymaker. Two Tomy directors from Marunouchi Capital will step down.

AEON Financial Service Co. gained 1.7 percent as Jefferies LLC upgraded shares of the credit-card provider to hold from underperform.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE