Japan’s Topix Advances After Biggest Weekly Drop Since October

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Japanese stocks rose, with the Topix index rebounding from its steepest weekly retreat since October, as investors watched developments in Greece’s debt crisis and Chinese shares advanced for a third day.

Nintendo Co. gained 1.5 percent. The game maker said its president, Satoru Iwata, died of cancer on July 11. Kuroda Electric Co. surged 9.1 percent after boosting its dividend forecast. ANA Holdings Inc. added 4.1 percent after Mitsubishi UFJ Morgan Stanley Securities Co. increased its rating on the stock. Drugmaker Eisai Co. slumped 2.3 percent.

The Topix gained 1.9 percent to 1,613.51 at the close of trading in Tokyo on Monday, with all bar one of its 33 industry groups climbing. The measure slid 4.2 percent last week. The Nikkei 225 added 1.6 percent to 20,089.77 as Japan’s currency pared early-morning gains. European leaders gave Greek Prime Minister Alexis Tsipras three days to enact their main demands into Greek law in exchange for another bailout.

“The market had started pricing in fears we’re going to see a terrible outcome from China and Greece, but we’ve started feeling more optimistic now,” said Koichi Kurose, Tokyo-based chief market strategist at Resona Bank Ltd. “Stock prices are reflecting hopes Greece will come to a resolution. China looks to have reached its lows.”

The Topix closed last week 5.7 percent off a 2007 high reached June 24, as uncertainty over Greece’s future in the euro and the impact of China’s stock rout drove gauges of global equity volatility higher. A measure of expected price swings on the Nikkei 225 rose Friday to an almost six-month high.

GPIF Targets

China’s shares climbed as hundreds of stocks resumed trading and export data exceeded economists’ estimates. The Shanghai Composite Index rose as much as 3.9 percent, extending two days of gains after unprecedented government intervention stemmed a rout that erased almost $4 trillion of value.

Japan’s Government Pension Investment Fund reported its annual results on July 10, and released figures showing its asset mix is closing in on the targets outlined in a radical overhaul in October.

The world’s biggest pension fund delivered a 12 percent return in the year ended March 31, the most since its 2001 inception. Domestic stocks made up 22 percent of its 137.5 trillion yen ($1.1 trillion) in assets, within the deviation limit of its 25 percent target.

“The consensus was that the GPIF had already bought what it needed to in Japanese stocks,” said Shoji Hirakawa, chief equity strategist at Okasan Securities Co. “However, it looks like they still have another 4 or 5 trillion yen left to buy. It’s a big positive for the stock market.”

Financial Limbo

Tsipras, who says he wants to keep Greece in the currency union, has been in financial limbo since his government missed a payment to the International Monetary Fund and allowed its second rescue package to lapse on June 30. Any deal is unlikely to be rubber-stamped before Greece has to repay the European Central Bank 3.5 billion euros ($3.9 billion) on July 20, and so creditors discussed bridge financing to avert a default, officials said.

“We didn’t see a full agreement in the Greece talks, but they didn’t end in the worst-case scenario, and it’s positive that they’re still exploring a third bailout,” Okasan’s Hirakawa said. “But risks remain in this and you never know what will happen.”

Nintendo gained 1.5 percent. Company President Satoru Iwata, who led the Japanese game maker back to ascendancy in the early 2000s with the Wii console, died July 11 from bile duct cancer. In March, Iwata ended his hold-out against making Nintendo’s iconic characters available on smartphones and tablet computers, agreeing to form a venture with DeNA Co. in an effort to recapture casual players.

Kuroda Electric

Kuroda Electric jumped 9.1 percent, its highest close since 2005. The electronic component maker raised its full-year dividend to 94 yen a share from its previous forecast of 36 yen.

ANA gained 4.1 percent, its highest close since May 2009. Mitsubishi UFJ raised its rating on the stock to neutral from underweight.

Eisai slumped 2.3 percent, the second-most on the Nikkei 225. Eisai partner Biogen Inc. dropped the most since April in New York after Cowen & Co. said the biotechnology company’s stock price faces risk from data coming later this month on a drug to treat Alzheimer’s disease.

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