Japan's Topix Posts Longest Weekly Losing Streak in 19 Months

  • Stocks fall in Tokyo as investors await U.S. payrolls report
  • U.S. futures slip after S&P 500 pared gains in afternoon trade

Japanese stocks slumped, driving the Topix index to its longest losing weekly streak since February 2014, as investors await a U.S. jobs report to provide the last major clue on the state of the world’s biggest economy before the Federal Reserve next meets.

The Topix fell 2.1 percent to 1,444.53 at the close of trading in Tokyo, swinging from an early gain of 0.7 percent. The measure capped a 6.8 percent drop this week, its fourth straight weekly loss. About 11 shares fell for each that rose on the gauge. The Nikkei 225 Stocks Average lost 2.2 percent to 17,792.16. The yen rose 0.5 percent to 119.43 per dollar, strengthening for a second day.

Glassmakers, consumer finance stocks and insurers led declines among the 33 Topix industry groups, while the utility sector was the only group to rise. Shizuoka Bank Ltd. jumped 3.2 percent, the most on the Nikkei 225, after the regional lender’s investment rating was boosted by Barclays Plc.

“We have very light volumes, a big U.S. holiday on Monday and with payrolls tonight, investors not doing much besides taking some risk down,” said David Welch, head of equity sales trading at Reorient Group in Hong Kong. “Yesterday’s bounce was artificial with China closed, and with the U.S. payrolls data tonight, people are taking risk off.”

U.S Futures

Futures on the Standard & Poor’s 500 Index fell 0.4 percent after the underlying measure closed up 0.1 percent on Thursday, erasing a rally of as much as 1.3 percent. U.S. market are closed on Monday for a holiday. The Stoxx Europe 600 Index jumped 2.4 percent after President Mario Draghi said the European Central Bank is expanding the scope of monetary stimulus amid signs of a slowdown in the region.

“Investors are waiting to see the U.S. jobs report,” said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo. “The ECB sent a message that it is keeping an eye on markets, which provides relief.”

The U.S. August nonfarm payrolls report on Friday represents the last major data point before the Fed meets on Sept. 16-17 to discuss the timing of its first increase in interest rates in nearly a decade. U.S. reports Thursday showed jobless claims rose more than forecast last week, while a measure of the services industry hovered just below a 10-year high.

Fed Rates

Futures traders are betting the Fed will push back raising borrowing costs. The probability of an increase in September has fallen to 30 percent, from 38 percent at the end of last week, according to data compiled by Bloomberg.

A rout in global equities last month, sparked by China’s devaluation of its currency, erased more than $5.7 trillion from the value of global shares amid growing concern that the world’s second-biggest economy may be in worse shape than analysts had estimated.

Market in mainland China are closed for a second day for holidays marking the end of World War II.

The Topix Glass and & Ceramics Products Index slumped 2.9 percent to lead declines among the industry groups on the broader gauge. NGK Insulators Ltd., which sells industrial ceramic products, tumbled 4.6 percent after pleading guilty to price fixing and bid rigging. The company was fined $65.3 million by the U.S. Department of Justice.

The Topix Electric Power & Gas Index climbed less than 0.1 percent as the only group to gain. Electric Power Development Co. led the advance, rising 2.8 percent.

Shizuoka Bank jumped 3.2 percent after Barclays raised its rating to overweight from underweight.

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