Japan stocks capped their longest winning streak since June after strong U.S. data bolstered the case for raising interest rates, sending the yen to an almost eight-year low against the dollar.
Fuji Heavy Industries Ltd., which gets 60 percent of revenue from North America, added 4.3 percent. Mitsubishi Gas Chemical Co. rose 2.8 percent after announcing a buyback. Sumitomo Electric Industries Ltd. lifted its earnings forecast, sending shares surging 5.1 percent. Energy explorer Inpex Corp. slumped 1.1 percent after a selloff in crude.
The Topix rose 0.1 percent to 1,661.3 at the close in Tokyo, after falling as much as 0.4 percent. The Nikkei 225 Stock Average added 0.2 percent to 20,472.58. The yen traded at 122.99 per dollar after yesterday falling 1.3 percent to its weakest since July 2007.
“At this level in the dollar-yen, we could see earnings being revised upward for companies across the board,” said Ichiro Yamada, general manager of equities at Fukoku Mutual Life Insurance. “Market participants could be eying the 124.14 yen level next,” he said, citing the yen’s 2007 low. “After that, the currency could cap losses at around 125 per dollar.”
The greenback’s strength was spurred by better-than-estimated U.S. capital goods orders and new-home sales. Fed Bank of Cleveland President Loretta Mester said the U.S. economy is close to the point where it can support higher borrowing costs.
Exporters gained broadly on the weaker yen. Fuji Heavy jumped 4.3 percent to a record, while Mazda Motor Corp. advanced 1.4 percent.
Nonferrous metal producers rose the most among the Topix’s 33 industry groups. Sumitomo Electric added 5.1 percent after boosting its operating profit target by 11 percent to 200 billion yen ($1.6 billion) in the year ending March 2018.
Mitsubishi Gas strengthened 2.8 percent after announcing it will spend as much as 9 billion yen on a stock buyback, equal to about 2.2 percent of outstanding shares.
Energy shares slumped after the dollar’s rally sent crude oil prices tumbling yesterday. Inpex and Japan Drilling Co. each lost 1.1 percent.
E-mini futures on the Standard & Poor’s 500 Index were little changed after the underlying measure dropped 1 percent on Tuesday, its biggest decline since May 5.