Japan Stocks Rise as Higher Earnings Boost Investor Confidence

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Japan’s Topix index rose, after closing little changed for two days, as companies from Terumo Corp. to Kajima Corp. reported gains in earnings.

Medical device maker Terumo surged 13 percent after saying profit jumped and it will buy back shares. Construction company Kajima added 6.8 percent after reporting net income more than doubled. Daikin Industries Ltd added 5 percent after the Nikkei newspaper said the air-conditioner maker will post a 10 percent increase in operating profit. Fast Retailing Co. dropped 4.7 percent as it reported a slide in sales at its Uniqlo stores.

The Topix added 0.4 percent to 1,665.85 at the close of trading in Tokyo, after earlier falling as much as 0.3 percent. About 10 shares rose for every seven that fell, with volume 11 percent above the 30-day average. The Nikkei 225 Stock Average climbed 0.5 percent to 20,614.06. The yen traded at 124.41 per dollar after weakening 0.3 percent on Tuesday

“The focus on individual stock moves will persist,” Hiroichi Nishi, a manager at SMBC Nikko Securities Inc. in Tokyo, said by phone. “The domestic environment is good overall. The economy is on its way to a recovery, and corporate earnings are generally doing well. In terms of demand, individual investors are looking to buy on dips.”

More than 110 firms on the Topix index report earnings on Wednesday. Of the companies that have reported quarterly results this season and for which estimates are available, 63 percent exceeded profit expectations, an improvement from the 48 percent that beat forecasts in the previous quarter, according to data compiled by Bloomberg.

U.S. Futures

E-mini futures on the Standard & Poor’s 500 Index added 0.1 percent after the underlying measure lost 0.2 percent on Tuesday in New York.

U.S. factory orders rose 1.8 percent in June from the previous month, in line with forecasts from economists surveyed by Bloomberg, and rebounding from two months of declines, data showed Tuesday. Reports on the services industries and monthly payrolls are due later this week, giving investors a gauge on the strength of the economy.

Interest-rate futures showed traders are raising the likelihood of an increase next month by the Federal Reserve after Fed Bank of Atlanta President Dennis Lockhart told the Wall Street Journal that it would take significant deterioration in economic data to convince him that a hike in September should be delayed.

Traders are pricing in a 48 percent probability that the Fed will raise rates in September. That compares with a 38 percent chance earlier Tuesday.

Stock Moves

Terumo gained 13 percent to close at a record. The medical-equipment maker said first-quarter net income surged 73 percent and it will spend as much as 11 billion yen buying back shares.

Kajima added 6.8 percent to close at its highest level since 2006. Operating profit jumped 76 percent to 11.7 billion yen, beating analysts’ estimates.

Daikin rose 5 percent, the most since November. Operating profit likely rose 10 percent on the year in the first quarter to more than 60 billion yen, the Nikkei newspaper reported.

Fast Retailing dropped 4.7 percent, the biggest drag on the Nikkei 225. Sales at its Uniqlo stores in Japan fell 1.5 percent on the year in July, the retailer said.

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