Japan Shares Gain After BOJ Decision as Drugmakers Lead Advance

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Japan’s Topix index rose for a fourth day, following U.S. equities higher, after the Bank of Japan said it would maintain record stimulus. Drugmakers led the advance.

Astellas Pharma Inc. gained 1.8 percent, the biggest boost to the Topix Pharmaceuticals index. Toyota Motor Corp., the world’s largest carmaker by market value, added 0.9 percent as exporters gained. Takashimaya Co. jumped 4.2 percent after Mizuho Financial Group Inc. raised its rating on the department-store operator. Toei Co. slumped 1.4 percent as Nomura Holdings Inc. cut its assessment of the movie distributor’s stock.

The Topix added 0.5 percent to 1,646.41 at the close of trading in Tokyo, taking its four-day advance to 4.2 percent. The Nikkei 225 Stock Average rose 0.4 percent to 20,463.33. The Standard & Poor’s 500 Index advanced for a fourth day on Tuesday as weak U.S. retail sales damped prospects for a September interest-rate increase. In Europe, Greek Prime Minister Alexis Tsipras started his pitch for a bailout that’s sparked a revolt in his own party.

“It looks as if the Greek problem will come to a resolution,” said Masaru Hamasaki, head of the investment information department at Amundi Japan Ltd., which oversees about 3.7 trillion yen ($30 billion). “We’re seeing a rebound as the external environment calms down.”

BOJ Decision

The BOJ will continue to expand the monetary base at an annual pace of 80 trillion yen, it said in a statement on Wednesday in Tokyo, matching forecasts by all but two of 35 economists in a Bloomberg survey. It lowered its inflation projection for the fiscal year through March 2016 to 0.7 percent from 0.8 percent and forecast 1.9 percent for the following year.

More than a third of analysts surveyed by Bloomberg said they don’t expect the Japanese central bank to ease more in the future.

Fed Chair Yellen addresses Congress for her semi-annual monetary policy testimony on Wednesday with traders paring rate-rise bets after a report showed sales at U.S. retailers unexpectedly dropped in June, upending optimism about the strength of the rebound in consumer spending in the second quarter.

“With U.S. retail sales falling short of expectations, investors will be waiting for Janet Yellen’s speech to gauge the situation for U.S. rates and we could easily see some profit taking,” said Hiroichi Nishi, a manager at SMBC Nikko Securities Inc. in Tokyo.

Drugmakers, Exporters

Drugmakers led gains today on the Topix, followed by precision-instrument makers and warehouse operators.

Astellas Pharma climbed 1.8 percent. Electro-optics products maker Hoya Corp. rose 3.1 percent. Toyota, which gets about 80 percent of its sales abroad, climbed 0.9 percent. Canon Inc., the world’s biggest camera maker, gained 1.8 percent.

Takashimaya added 4.2 percent, the most since February. Mizuho boosted its investment rating on the stock to buy from neutral.

Toei sank 1.4 percent after Nomura cut its investment grade to neutral from buy.

The Greek premier surrendered to European demands for immediate action to qualify for up to 86 billion euros ($95 billion) of aid he needs to keep his country in the euro area and now faces a vote on creditor-imposed bailout terms.

The Shanghai Composite Index slumped for a second day after closing last week 5.2 percent higher. China’s stock market gains, sparked by unprecedented government intervention, are reversing as hundreds of companies resume trading after suspending their shares during the recent market turmoil.

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