Japanese Stocks Rise as Exporters Gain, Investors Await Yellen

  • Volume remains muted while yen weakens, boosting carmakers
  • Investors await Fed Chair Yellen’s speech in Jackson Hole

Japanese shares rose, tracking gains in U.S. shares, with exporters rallying as the yen weakened. Volume slumped as investors assessed the outlook for Federal Reserve tightening ahead of Chair Janet Yellen’s speech.

Exporters provided the biggest support to the Topix index at the close in Tokyo. Investors are weighing the likelihood of U.S. interest rate hikes after data on the world’s biggest economy painted a mixed picture, with American new home sales surging while manufacturing slowed. Trading volume was 34 percent below the 30-day average ahead of Fed Chair Janet Yellen’s speech later this week at Jackson Hole, Wyoming.

SecurityPercent ChangePrice
Topix         +0.7%    1,306.71
Nikkei 225         +0.6%    16,597.30
Yen-Dollar         -0.2%       100.39

“The yen managing to stay above 100 per dollar is positive, and overseas markets have been firm,” said Kiyoshi Ishigane, chief strategist at Mitsubishi UFJ Kokusai Asset Management Co. in Tokyo. But “we’re low on investors at the end of summer and we’re also waiting for Yellen’s speech in Jackson Hole, so many don’t want to take a position in the market.”

Futures on the S&P 500 Index declined 0.1 percent. The underlying measure added 0.2 percent on Tuesday, closing near a record high. The mixed economic data brought into question recent hawkish comments from Fed Vice Chairman Stanley Fischer and New York Fed President William Dudley.

All but five of the Topix’s 33 industry groups rose, with about two shares climbing for every one that fell. Price swings on the Nikkei 225 Stock Average remained near this year’s low after spiking on June 24, the day the U.K. voted itself out of the European union.

  • Honda Motor Co. added 0.8 percent following a Nikkei newspaper report that it will raise output capacity for hybrid motors in October. 
  • Screen Holdings Co. was the biggest gainer on the Nikkei 225, advancing 7.8 percent, after Mizuho Financial Group Inc. raised its target price on the stock by 14 percent, citing improving margins.
  • A Topix gauge tracking retailers sank, providing the biggest drag to the broader measure. Furniture shop operator Nitori Holdings Co. lost 5.6 percent after reporting a slowdown in monthly sales growth. Clothing chain operator Shimamura Co. dropped 8.1 percent after same-store sales in August slumped 5.5 percent on the year. 
  • SoftBank Group Corp. advanced 2.5 percent after JPMorgan Chase & Co. raised its rating on the telecommunication operator to overweight, citing stable cash flows from its domestic operations as well as faster growth in U.S. unit Sprint Corp.’s earnings.

The Topix has retreated 16 percent this year, placing the benchmark gauge as the second-worst performer among developed markets. Investors continue to seek clues on whether the Bank of Japan will add to its already record stimulus measures, and when the U.S. will raise interest rates.

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