Japan’s Topix index rose, paring its worst weekly slide in nine months, as Greece submitted a bailout proposal similar to that mooted by creditors and Chinese markets rebounded for a second day.
Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, gained 2.3 percent as banks and food stocks led gains among the 33 Topix industry groups. Japan Tobacco Inc. rose 2.6 percent. Fast Retailing Co. tumbled 6 percent, the biggest drag on the Nikkei 225 Stock Average, after its chief financial officer said cool summer temperatures in Japan and wider losses at Uniqlo’s U.S. stores may weigh on its performance.
The Topix added 0.2 percent to 1,583.55 at the close of trading in Tokyo, paring its biggest weekly loss since October to 4.2 percent. About as many shares rose as fell on the gauge. The Nikkei 225 slipped 0.4 percent to 19,779.83.
“China is forcibly calming the market down, and it’s working, but how they’re doing it is scary,” said Tomomi Yamashita, a fund manager in Tokyo at Shinkin Asset Management Co. “Things look better in Greece and ordinarily the market would surge on that, but it hasn’t because of lingering concerns over China.”
The yen weakened 0.5 percent to 121.98 per dollar after yesterday declining 0.5 percent from its strongest level in seven weeks as demand dropped for haven assets after China stocks rebounded. About $3.9 trillion was wiped from the value of the country’s equity market from June 12 through Wednesday, with losses at the start of the week igniting a wave of risk aversion.
Chinese stocks rebounded for a second day, with the Shanghai Composite Index jumping 5.1 percent Friday, while the Shenzhen Composite Index added 4.1 percent. The Hang Seng China Enterprises Index of mainland shares listed in Hong Kong climbed 4.3 percent.
The largest U.S.-listed exchange-traded fund tracking Chinese stocks soared 20 percent in New York amid relief over Thursday’s rebound.
E-mini futures on the Standard & Poor’s 500 Index jumped 1.1 percent after the underlying measure added 0.2 percent in New York on Thursday.
The government of Greek Prime Minister Alexis Tsipras sought a three-year bailout loan of at least 53.5 billion euros ($59.2 billion), in a last-ditch effort to keep the country in the euro. The proposal is similar to the one presented by creditors last month.
The package of reforms and spending cuts, including pension savings and tax increases, was sent to creditors late Thursday and will be presented to the Greek parliament Friday. The proposals are set to be discussed at a summit of European Union leaders Sunday to determine whether Greece will get a new bailout, or be forced to leave the single currency.
“Stocks are being bought on hopes for the new Greece proposal,” Yutaka Miura, a technical analyst at Mizuho Securities Co. in Tokyo said by phone. “China has managed to stop its decline for now using all sorts of government tools. But once trading resumes in shares that had stopped trading, we’ll see more selling.”
European market reaction suggested investors believe a deal can be done, or that the European Central Bank can successfully contain the fallout if one isn’t. The benchmark Stoxx Europe 600 Index rose 2.2 percent and Greek, Portuguese and Italian bonds rose.
The International Monetary Fund cut its forecast for global economic growth this year on Thursday, citing a weaker first quarter in the U.S. The Washington-based lender expressed confidence that financial-market turbulence from China to Greece won’t cause widespread damage.
Mitsubishi UFJ added 2.3 percent, while Mizuho Financial Group Inc. rose 1.2 percent.
Japan Tobacco gained 2.6 percent, the biggest support to the Topix Foods Index. Cigarette sales volumes in June rose 4.6 percent from a year earlier, the maker of tobacco and food said after markets closed.
Fast Retailing’s 6 percent decline was its steepest drop since April 2014. The apparel retailer on Thursday maintained its forecast for annual profit at 120 billion yen ($984 million), 9.8 percent below the 133 billion yen average of analyst estimates compiled by Bloomberg. Unseasonably cool weather has damped demand for summer clothes, CFO Takeshi Okazaki said Thursday.