Japan Shares Rise, Led by Brokerages as Investors Weigh Earnings

Can Japan Ever Reach Its 2% Inflation Target?
  • Suzuki, Kuraray gain on earnings while Olympus sinks
  • Strategists see 5.2% gain in Topix by year-end, survey shows

Japanese shares rose for the first time in four days, led by gains in brokerages and shippers. Companies including Suzuki Motor Corp. and Kuraray Co. gained on earnings while Olympus Corp. sank.

The Topix index added 0.9 percent to 1,282.99 at the close in Tokyo, reversing a drop of as much as 0.7 percent. The Nikkei 225 Stock Average added 1.1 percent. The yen weakened 0.3 percent to 101.56 per dollar after falling 0.4 percent on Wednesday. The S&P 500 Index climbed 0.3 percent on gains in crude prices and as corporate earnings helped boost financial shares. U.S. nonfarm payrolls data for July are due Friday.

“We’re in a wait-and-see mode ahead of the U.S. jobs report,” said Mitsushige Akino, a Tokyo-based executive officer at Ichiyoshi Asset Management Co. “The fact that oil prices have risen and U.S. shares have regained strength is a slight positive.”

Earnings season continues in Japan, with over 250 firms scheduled to report on Friday. Of the 260 companies that have posted earnings so far and for which Bloomberg has estimates, 54 percent have beaten analyst expectations for profit, while 58 percent fell short of predictions for sales.

Brokerages and shippers rose the most among the Topix’s 33 industry groups, while foodmakers and oil and coal producers led declines. About 11 shares advanced for every seven that declined on the benchmark gauge.

  • Suzuki Motor jumped 6.9 percent after the carmaker’s first-quarter profit beat analyst estimates.
  • Maruha Nichiro Corp. added 2.5 percent after the Nikkei newspaper said the fisheries company’s first-quarter pretax profit probably rose to a record. Its earnings will be similar to what the Nikkei reported, the company said in response to the newspaper article. 
  • Kuraray rose the most on the Nikkei 225, climbing 8.3 percent, after the chemical maker’s second quarter profit beat analysts’ estimates.
  • Olympus fell 4.3 percent after its first-quarter profit missed estimates, and the medical-equipment maker lowered its full-year net income target.

Strategists and investors see the Topix rising to 1,350 by year-end, according to the median forecast in a Bloomberg News survey as of Aug. 3. That implies an increase of 5.2 percent from Thursday’s close. The benchmark gauge has fallen 17 percent this year, the second-worst performer out of 24 developed markets.  

“We’re now looking to see whether Japan is able to support its economy by itself.” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd.

Futures on the S&P 500 were little changed. The underlying measure snapped a two-day retreat on Wednesday in a late-day surge as a rebound in crude oil boosted energy producers, offsetting declines in defensive shares.

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