Japanese Stocks Slide in Final Minutes of Trading as Yen Gains

  • Topix falls 7.5% this quarter to cap a second-quarterly drop
  • BOJ may take action next month, Mitsubishi UFJ Kokusai says

Japanese stocks closed lower, capping their worst six-month decline since the depths of the global financial crisis, as exporters wiped out earlier gains as the yen strengthened.

The Topix index slid 0.2 percent to 1,245.82 in the final minutes of trading in Tokyo, erasing an advance of as much as 1.3 percent. The measure posted a 7.5 percent drop this quarter after a 13 percent plunge in the first three months of the year. The Nikkei 225 Stock Average climbed 0.1 percent to 15, 575.92. The yen rose 0.2 percent to 102.58 per dollar, erasing losses of as much as 0.2 percent.

“The U.S. is seen to be unable to raise rates, and with the future of the global economy unclear, we’re probably not going to see the yen weaken any further,” said Mitsushige Akino, a Tokyo-based executive officer at Ichiyoshi Asset Management Co. “The impression is that the Nikkei 225 will find it tough to rise above 16,000.”

The MSCI All Country World Index was unchanged Thursday. The gauge rose 2.2 percent on Wednesday to cap its steepest two-day gain since August, as central banks around the world signaled a readiness to act if required. The measure had tumbled 6.9 percent over the previous two sessions after the U.K.’s shock decision to exit the EU led to a flight from risk assets.

In Limbo

With Britain still in limbo over how it might leave the EU, a majority of economists surveyed by Bloomberg predicted that the Bank of England will add more stimulus to soften Brexit’s blow. There are also heightened expectations the Bank of Japan will enact fiscal or monetary easing, according to Nomura Holdings Inc.

“We don’t know how much they can act yet but of course there are domestic expectations for additional easing from the BOJ,” said Kiyoshi Ishigane, chief strategist at Mitsubishi UFJ Kokusai Asset Management Co. in Tokyo. “They’ll probably have to take some kind of action next month.”

Exporters, which were among the biggest contributors to early gains on the Topix, weakened towards the end of the session as the yen’s rebound curtailed the outlook for overseas earnings. The Topix Electric Appliances Index closed little changed while the Topix Transportation Equipment Index lost 0.6 percent. Toyota Motor Corp. slid 1.3 percent.

  • Sony Corp. rose 0.9 percent, taking its gain this week to 7.7 percent. Restructuring in Sony’s television and smartphone business is on track and the company is “entering its next growth phase,” Mitsubishi UFJ Morgan Stanley Securities Co. analyst Takeo Miyamoto wrote in a note after Sony released its new business strategy report on Wednesday.

  • Softbank Group Corp. fell 0.3 percent after people familiar with the matter said U.S. regulators are examining the mobile network operator over allegations about Nikesh Arora’s activities before he resigned as president last week.

  • Drugmaker Eisai Co. dropped 4.2 percent, leading losses on the Topix’s gauge of pharmaceutical companies. Investors are disappointed after Eisai’s presentation in New York on Wednesday showed most of its drug pipelines were still in the early stages of development, SMBC Friend Research Center Ltd. analyst Satoshi Takaoki said.

Futures on the S&P 500 Index slipped 0.4 percent. The underlying gauge rose 1.7 percent on Wednesday, capping its strongest two-day climb in more than four months.

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