- BOJ Governor Kuroda left policy open to interpretation Monday
- Oil holds above $45 after talks between Russia, Saudi Arabia
Japanese shares rose for a fifth day as the yen weakened and investors weighed the possibilities for stimulus from central banks.
The Topix index advanced 0.7 percent at the close in Tokyo with telecommunication-service providers and banks among groups contributing the most to the gain. Equities are in a holding pattern with U.S. markets closed for the Labor Day holiday on Monday and comments by Bank of Japan Governor Haruhiko Kuroda leaving open to interpretation the Japanese central bank’s next move. The yen weakened against the dollar but pared losses after Koichi Hamada, an economic adviser to Prime Minister Shinzo Abe, said the BOJ should wait until after the Federal Reserve decides on interest rates to act.
“As we continue to look toward the Fed and the BOJ’s meetings, that’s still the main focus of the market,” said Ichiro Yamada, general manager of equities at Fukoku Mutual Life Insurance Co. in Tokyo. “We don’t have any obvious major moves today but defensives, which were being sold recently, are being bought back a little.”
Hamada said the BOJ risks having its efforts overshadowed if it expands monetary stimulus at its policy meeting on Sept. 21 and the Fed then just hours later decides to keep U.S. interest rates unchanged. As of Monday, traders are pricing in a 32 percent chance the U.S. central bank will raise borrowing costs at its September meeting.
Kuroda declined to rule out new initiatives to stoke inflation on Monday as the central bank conducts a comprehensive review of its policies and their effectiveness, while also refraining from specifying what other options might be considered beyond the three policy areas currently in action.
“The way monetary policy is going in the U.S., the yield curve will slowly become steeper, meaning earnings will improve in the financial sector,” said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities Co. in Tokyo. “The impression I get is that Bank of Japan Governor Kuroda is giving small hints as to what the policy review will find.”
A gauge of bank shares on the Topix advanced 0.7 percent on Tuesday, trimming its loss since the BOJ introduced its negative interest rates policy in January to 12 percent after falling as much as 32 percent. All three Japanese megabanks rose on Tuesday.
|Mitsubishi UFJ Financial Group Inc.||+0.02%||567.2 yen|
|Sumitomo Mitsui Financial Group Inc.||+1.3%||3,716.0 yen|
|Mizuho Financial Group Inc.||+0.9%||183.7 yen|
All but five of the 33 industry groups on the Topix rose.
- Amada Holdings Co. sank 5.1 percent after the metalworking machinery maker said it lowered its payout ratio target to 50 percent from the 100 percent it had pledged in May 2014. The Nikkei newspaper had earlier reported that Amada will lower its target.
- Kyowa Hakko Kirin Co. was the biggest gainer on the Nikkei 225, rising 5.2 percent, after positive results were released for its asthma treatment drug benralizumab during the third phase of clinical trials.
- Energy producers climbed on the Topix, with Idemitsu Kosan Co. advancing 2 percent. Crude traded above $45 a barrel after the world’s top two producers pledged to cooperate to stabilize global markets.
- Baby care goods maker Pigeon Corp. added 7.3 percent after earnings beat analyst consensus.
Futures on the S&P 500 Index rose 0.1 percent. The Stoxx Europe 600 Index climbed 0.1 percent, nudging ahead to its highest level since April.