Japanese Stocks Gain as Investors Weigh Earnings, BOJ Decision

Updated on

Japanese stocks rose, with the Topix index capping a second weekly advance, as investors weighed earnings and after the central bank maintained record stimulus measures.

SoftBank Group Corp. added 3.6 percent after the carrier said it will spend 120 billion yen ($962 million) buying back shares. Nikon Corp. surged 4.7 percent after the camera maker raised its profit forecast. Rival Konica Minolta Inc. slumped 8.5 percent after profit missed analyst estimates. Konami Corp. dropped 2.5 percent after Morgan Stanley Mitsubishi UFJ Securities Co. cut its rating on the video-game maker.

The Topix index gained 0.3 percent to 1,679.19 at the close of trading in Tokyo, erasing an earlier loss of 0.6 percent and posting a 1.2 percent weekly advance. The measure is up 19 percent in yen terms this year and 14 percent in dollars. The Nikkei 225 Stock Average added 0.3 percent to 20,724.56.

“A lot of the move is coming from individual stocks,” said Seiichiro Iwamoto, who helps oversee the equivalent of $37 billion at Mizuho Asset Management Co. in Tokyo. “It’s still too early for the Bank of Japan to increase easing. It’ll likely come around October.”

More than 250 firms on the Topix index report earnings on Friday. Of the companies that have posted quarterly results this season and for which estimates are available, 64 percent exceeded profit expectations, an improvement from the 48 percent that beat forecasts in the previous quarter, according to data compiled by Bloomberg.

BOJ Stimulus

The BOJ refrained from expanding monetary stimulus Friday as Governor Haruhiko Kuroda bets the world’s third-biggest economy will emerge from a recent soft patch and inflation will pick up.

The central bank will keep increasing the monetary base at an annual pace of 80 trillion yen, it said in a statement in Tokyo. The result was expected by all 37 economists surveyed by Bloomberg.

E-mini futures on the Standard & Poor’s 500 Index were little changed after the underlying measure fell 0.8 percent on Thursday in New York as biotechnology shares tumbled while media companies sold off on disappointing results from Viacom Inc. and Twenty-First Century Fox Inc. The Stoxx Europe 600 Index also lost 0.8 percent

Along with corporate earnings, investors are watching U.S. economic reports to gauge when the Federal Reserve will increase interest rates. Traders are pricing in a 48 percent probability that the Fed will raise rates in September.

Jobless Claims

A report Thursday showed jobless claims rose by 3,000 to 270,000, hovering near four-decade lows as employers hold on to more workers in response to increased demand following a slump in early 2015. The government’s payrolls report on Friday is projected to show employers took on 225,000 workers last month, while the jobless rate held at a seven-year low of 5.3 percent.

“At the moment, moves are centered around stock picking and shifting sectors,” Hitoshi Asaoka, Tokyo-based senior strategist at Mizuho Trust & Banking Co., said by phone.

SoftBank added 3.6 percent, the biggest boost to the Topix, after saying it will buy back about 1.7 percent of shares. The carrier also said net income almost tripled to 213.4 billion yen in the three months ended June 30. That beat the 154 billion yen average of three analyst estimates compiled by Bloomberg.

Nikon gained 4.7 percent, the second-biggest gain on the Nikkei 225. The camera maker reported 3.9 billion yen in operating profit, beating analyst estimates for a 1.84 billion yen loss.

Konica Minolta slumped 8.5 percent after saying net income fell 29 percent to 6.6 billion yen, missing analyst estimates for 8.8 billion yen in profit.

Konami sank 2.5 percent after Morgan Stanley MUFJ reduced its rating on the stock to equalweight from overweight.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE