Japanese Stocks Rebound as Global Shares Climb on Brexit Bets

Japanese stocks rebounded, paring the benchmark equity gauge’s worst weekly decline since mid-February, amid speculation Britons won’t vote to leave the European Union next week.

The Topix index added 0.8 percent to 1,250.83 at the close in Tokyo. After slumping 2.8 percent on Thursday, the measure fell 6 percent for the week. The yen strengthened 0.1 percent to 104.14 a dollar after surging yesterday as the Bank of Japan opted to keep policy unchanged. The S&P 500 Index halted its longest losing streak since February while a measure tracking world shares climbed after U.K. Labour Party lawmaker Jo Cox was murdered while she met constituents. She was in favor of remaining in the EU, fueling bets voters will choose to stay in the June 23 referendum.

“The dollar-yen market has calmed somewhat,” said Shunichi Otsuka, a general manager of research and strategy at Ichiyoshi Securities Co. in Tokyo. “The fact that U.S. shares have risen is also a tailwind for Japanese equities.”

All but five of the 33 industry groups on the benchmark equity gauge rose. Only 48 shares fell on the Nikkei 225 Stock Average, which advanced 1.1 percent to 15,599.66.

  • Semiconductor maker Sumco Corp. climbed 5.3 percent after slumping 6.5 percent on Thursday, while electronic parts manufacturer Alps Electric Co. added 2.3 percent after falling 6.3 percent.
  • Tokuyama Corp., an industrial chemical producer, surged 6.9 percent for the second-biggest gain on the Nikkei 225 after Mitsubishi UFJ Morgan Stanley Securities Co. boosted its target price on the stock, citing a recovery in its finances
  • Sky Perfect JSAT Holdings Inc. sank 5.6 percent, the most on the Nikkei 225, after the broadcasting services provider cut its profit forecast, citing a delay in a satellite launch

Uncertainty over whether Britain will vote to leave the EU has helped erase almost $2 trillion of global equity value over the past week and a gauge of volatility for Japanese equities had risen to its highest level since February on Thursday. The Topix’s biggest weekly decline since Feb. 12 comes as the yen has gained for six days straight.

The Topix is down 19 percent in 2016, the second-worst performance among 24 developed markets tracked by Bloomberg. Shares have been buffeted by a surging yen as central bank policy loses its sway over the equity market. The losses led to signs of overselling in the Topix’s 14-day relative-strength index. The technical indicator fell to 29 on Thursday, below the 30 level that some traders use as a signal shares have fallen too far.

Both sides of the debate on whether the U.K. should leave the EU suspended their campaigning following the murder of lawmaker Cox. Cox, 41, was shot dead in a town in northern England. She was a fervent advocate of Britain remaining in Europe, as well as a champion of the poor and of Syrian refugees.

“It seems like the likelihood of remaining in the EU has increased,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd. “Until the referendum is over, volatility will likely continue being high.”

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