Japan Stocks Rise in Low Volume as Yen Slips, Crude Rebounds

  • Commodity shares, banks lead declines while airlines advance
  • Benchmark index rises after best weekly gain in six years

Japanese stocks rose in thin trading after the yen turned lower while crude rebounded from losses. Airlines led gains, while oil explorers fell the most.

The Topix index added 0.6 percent to 1,300 at the close in Tokyo, after trading in a range between gains and losses of 1 percent. Volume was 28 percent lower than the 30-day average. The Nikkei 225 Stock Average rose 0.9 percent to 16,111.05 on Monday.

“We’re unlikely to see a big trend emerge for Japanese stocks,” said Akihiro Tsunoda, a senior investment manager at Sompo Japan Nipponkoa Asset Management Co. in Tokyo. “They may not go up much, but they also won’t go down either. Until we see more certainty around the U.S. economy, this lack of direction is likely to continue.”

Japanese equities have been among the most volatile around the world this year, reacting to the moves of the yen and oil. With stocks tumbling across the globe, the yen has been seen as a haven. Investors have sent the currency up more than 6 percent in 2016. The yen traded at 112.87 per dollar on Monday.

Despite the Topix’s 8 percent rally last week -- its best weekly performance since 2009 -- the measure has recouped less than a third of this year’s losses. The gauge is still down 16 percent for 2016, touching a 15-month low on Feb. 12. Equities dropped early this month on disappointment with the Bank of Japan’s negative interest rates decision. Last week’s rebound was sparked in part by speculation that central banks around the globe will do whatever is necessary to bolster economic growth. Turnover during the rebound has been relatively low, with the Topix’s volume on Monday dipping to the third-lowest of the year.

G20

Investors are awaiting the start of a Group of 20 meeting this week. Officials from the world’s biggest economies gather in Shanghai starting from Friday, with the weakening global-growth outlook expected to dominate the agenda.

“Expectations haven’t been erased for the G20 to announce policy for boosting growth or dealing with low oil prices,” Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo, said by phone.

E-mini futures on the Standard & Poor’s 500 Index rose 0.5 percent after the underlying equity gauge closed little changed on Friday as advances in technology and consumer shares were enough to offset declines among commodity producers driven by a drop in crude.

Banks, Airlines

Energy explorers led losses after crude dropped more than 3 percent on Friday, sending oil explorer Inpex Corp. down 4.8 percent. Airlines gained the most among the Topix’s 33 industry groups on prospects for lower fuel costs, with Japan Airlines Co. rising 5.6 percent. West Texas Intermediate was 1.4 percent higher on Monday, reversing an earlier drop of 0.5 percent.

Banks resumed declines, with Mitsubishi UFJ Financial Group Inc. dropping 1.8 percent after announcing it would cut deposit and fixed-term mortgage rates in the wake of the Bank of Japan’s adoption of negative interest rates. Sumitomo Mitsui Financial Group Inc. lost 2.5 percent.

Kansai Electric Power Co. dropped 3.3 percent after state broadcaster NHK said a small radioactive water leak may delay the restart of a nuclear reactor. Itochu Techno-Solutions Corp. jumped 5.8 percent after Mizuho Financial Group Inc. lifted its rating on the network systems maker, citing earnings growth in its cloud computing division.

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