Japan's Topix Index Extends Best Monthly Gain Since February

  • Communication providers, banks lead gain among industry groups
  • Yen maintains three days of losses against U.S. dollar

Japanese stocks rose, with the Topix index extending its best monthly rally since February on reduced volume. Communication providers and banks led gains.

Mobile carrier KDDI Corp. added 4.9 percent after Deutsche Bank AG raised its rating on the stock. Takara Holdings Inc. jumped 6.6 percent after the drinks maker said preliminary profit beat its estimate. Asahi Kasei Corp., whose building unit is embroiled in a construction scandal, slid 4 percent. Tokyo Electric Power Co. slumped 4.5 percent after a report the Japanese government recognizes that the 2011 nuclear disaster resulted in cancer for an employee at the Fukushima power plant.

The Topix added 0.3 percent to 1,499.28 at the close in Tokyo, with about five stocks falling for every three that rose. Volume was about 23 percent below the 30-day average. The Nikkei 225 Stock Average gained 0.4 percent to 18,207.15. The yen traded at 119.43 per dollar, after weakening for three days. Japanese equities fell Monday after a data showed China’s economy grew at the slowest quarterly pace since 2009.

“Japanese stocks dropped excessively yesterday as investors were concerned that foreign stocks might fall on China’s growth data,” said Mitsuo Shimizu, deputy general manager at Japan Asia Securities Group Ltd in Tokyo. “While the data showed the Chinese economy slowed, it also showed consumption is robust.”

U.S. Futures

E-mini futures on the Standard & Poor’s 500 Index slipped 0.1 percent after the underlying gauge rose less than 0.1 percent on Monday.

Stocks around the world have been rallying throughout October, restoring more than $4 trillion to the value of the global equity market, amid growing confidence the U.S. won’t raise interest rates this year. That came after last quarter’s volatility triggered by China’s surprise decision in August to devalue the yuan. The Topix index is up 6.2 percent in October, heading for its biggest monthly gain since February.

The probability of a Federal Reserve interest-rate increase by the December policy meeting has dropped to 30 percent, down from 70 percent at the start of August, according to futures data compiled by Bloomberg.

Takara Holdings jumped 6.6 percent, the most on the Nikkei 225, after saying preliminary net income for the six months through Sept. 30 was 2.5 billion yen, 67 percent above its forecast.

KDDI gained 4.9 percent after Deutsche Bank raised its rating on the stock to buy from hold, saying its shares have been oversold. KDDI plunged last month after Japanese Prime Minister Shinzo Abe instructed ministers to find ways to reduce the burden of mobile phone bills.

Asahi Kasei

Asahi Kasei slumped 4 percent, extending Monday’s 8.5 percent decline. Moody’s Investors Service revised its outlook on the company to negative from stable after the company said last week that its building unit altered construction data in an apartment in Yokohama that has tilted.

Tokyo Electric Power, also known as Tepco, slumped 4.5 percent after national broadcaster NHK said the health ministry recognized an employee’s leukemia is the result of the March 2011 nuclear disaster. It’s the first such recognition of its kind, NHK said.

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