Most Japan Shares Fall; Topix Caps Best Week Since ’09

Most Japanese shares declined, with the Topix Index capping its biggest weekly advance in more than three years, as the nation’s currency traded near 100 yen to the dollar for a fifth day.

Sony Corp., which gets nearly 70 percent of its revenue from outside Japan, dropped 1.5 percent. Chiyoda Corp., an industrial plant operator, tumbled the most on the Nikkei 225 Stock Average after Australia’s Woodside Petroleum Ltd. scrapped a liquefied natural gas project Chiyoda had bid on. Sharp Corp. jumped 7 percent after the Nikkei newspaper reported that its banks will roll over loans. Nuclear power producers rose the most on the Topix after SMBC Nikko Securities Inc. said there’s increased likelihood operations may resume at some plants halted after the March 2011 nuclear disaster.

Twice as many stocks fell as rose on the Topix, which closed 0.1 percent higher in Tokyo. The measure gained 7.7 percent this week, its biggest weekly surge since December 2009. The Nikkei 225 lost 0.5 percent to 13,485.14, with volume 45 percent greater than its 30-day average.

“These past few days, the yen looked like breaking through to 100 yen to the dollar but just didn’t manage it,” said Juichi Wako, a Tokyo-based senior strategist at Nomura Securities Co., Japan’s biggest brokerage. “Once investors start viewing the 100 yen wall as being quite thick, the stock market will probably take a breather.”

7-Day Surge

The Topix has climbed 59 percent since mid-November as Prime Minister Shinzo Abe and central bank Governor Haruhiko Kuroda pledged to defeat 15 years of deflation. The gauge traded at 1.3 times book value compared with 2.4 for the Standard & Poor’s 500 Index and 1.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

The Topix has gained on each of the eight days since April 3, when the BOJ began a meeting that ended with the announcement that it will double the monetary base by the end of 2014 by buying government bonds, its boldest round of quantitative easing.

The yen traded at 99.50 per dollar at the stock market close today after weakening as far as 99.95 yesterday. The Japanese currency has traded in the 99 yen range for the past five days, without once breaking through to 100 yen per dollar.

Sony, the maker of Bravia televisions, sank 1.5 percent to 1,659 yen, while Canon Inc., the world’s biggest camera maker, lost 0.5 percent.

Yen Preference

Panasonic Corp., Japan’s second-biggest television maker by market value, slipped 0.8 percent to 711 yen. Panasonic Chairman Fumio Ohtsubo said today he’s worried about the yen exceeding 100 to the dollar and prefers it within 95 to 100.

“If the yen goes beyond 100, the benefits will be less because there’re goods we purchase from overseas,” he said.

The Topix’s 14-day Relative Strength Index is now at 75.5, after rising on April 10 above 70, a threshold some traders view as a signal the gauge is overbought. The Topix’s RSI last traded above 70 on March 15, and the gauge fell 2.2 percent the following trading day.

Chiyoda tumbled 11 percent to 974 yen, its biggest drop since October 2009. The Japanese industrial plant operator fell after Woodside Petroleum said it scrapped plans for an onshore liquefied natural gas project on which Chiyoda bid.

Electricity producers provided the biggest boost to the Topix among the index’s 33 industry groups.

Nuclear Power

The sector jumped after SMBC Nikko Securities analyst Hidetoshi Shioda said there’s an increased likelihood for the resumption of nuclear plants that were shut following the March 2011 disaster at a Tokyo Electric Power Co. facility. He cited a draft of new rules announced yesterday by the Nuclear Regulatory Commission.

Tokyo Electric Power surged 16 percent to 409 yen, Kyushu Electric Power Co. soared 22 percent to 1,385 yen and Kansai Electric Power Co. jumped 14 percent to 1,177 yen.

Among other shares that rose, Sharp gained 7 percent to 335 yen. The company’s lenders may roll over 180 billion yen in loans and maintain a 180 billion yen credit line now that Sharp is expected to report a second-half operating profit, the Nikkei newspaper reported, without citing anyone.

The Nikkei Stock Average Volatility Index declined 0.9 percent to 28.60 today, indicating traders expect a swing of about 8.5 percent on the benchmark gauge over the next 30 days.