Japan Shares Cap Longest Winning Streak Since May Rout

Japanese shares advanced, with the Topix index climbing for a fourth day, amid lower volume before the conclusion of a U.S. Federal Reserve meeting. Stocks rose as Japan’s exports increased the most in three years.

Shippers jumped, with Kawasaki Kisen Kaisha Ltd. surging 9.5 percent. SoftBank Corp. climbed 4.2 percent after rival bidder Dish Network Corp. said it won’t make a new offer for Sprint Nextel Corp. Astellas Pharma Inc. added 4.3 percent on a report the drugmaker plans to sell its dermatology assets. Tokyo Electric Power Co. led declines on the Nikkei 225 Stock Average after finding unsafe levels of radioactivity in groundwater at its crippled Fukushima Dai-Ichi nuclear plant.

The Topix gained 1.9 percent to 1,106.57 at the close of trading in Tokyo, with volume about 37 percent below the 30-day average. The Nikkei 225 rose 1.8 percent to 13,245.22.

“As there was market turmoil on concern about tapering in the U.S., I think the Fed is going to try to bring some calm,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s second-biggest lender. “If there is renewed energy in the market, stocks should be able to rise above any selling pressure from investors waiting to take profit during market gains.”

About $2 trillion has been wiped from global markets since May 22, when Fed Chairman Ben S. Bernanke signaled the central bank’s asset-buying program could be scaled back if the employment outlook shows “sustainable improvement.” Investors are now awaiting his comments after the meeting ends today.

Futures on the Standard & Poor’s 500 Index climbed 0.1 percent. The measure rose 0.8 percent yesterday in New York. The Fed’s easing program has helped drive a 16 percent advance in the S&P 500 this year. The gauge has soared 144 percent from its bear-market low in 2009.

Exports Surprise

Data today showed Japanese exports rose 10 percent in May from a year earlier, the most since 2010, beating the median estimate of a 6.4 percent increase. The trade deficit stood at 994 billion yen ($10.4 billion), narrower than the 1.2 trillion yen estimate of 31 economists surveyed by Bloomberg News.

The Topix has swung an average of about 3.3 percent daily since May 22. The gauge’s 30-day historic volatility was at 41.91 today, its highest closing level since the 2011 earthquake and tsunami. The Nikkei Stock Average Volatility Index, which is calculated using options prices, climbed 1.7 percent to 38.99, indicating traders expect a swing of about 11 percent for the measure in the next 30 days.

Trading volume on the Topix was 37 percent below the 30-day average today, with 2.81 billion shares changing hands. This compares with a high of 7.65 billion shares on May 23, when the gauge plunged 6.9 percent.

Yen Holds

The yen was little changed at 95.21 per dollar as of 3:25 p.m. in Tokyo, after weakening the previous two days. Japan’s currency dropped as much as 19 percent against the dollar this year through May 17. While climbing since then, it has still declined about 10 percent for the year.

The Topix has fallen about 13 percent from an almost five-year high on May 22. Shares have declined amid a strengthening yen, disappointment about Prime Minister Shinzo Abe’s growth strategy and concern global stimulus will be reduced.

Investors are increasingly concerned Abenomics will fail, according to a Bank of America Corp. survey of 190 global fund managers in June. A net 17 percent of them are overweight Japanese shares, compared with a seven-year high of a net 31 percent in May. It’s the first decline in eight months.

Even after the recent fall, the Nikkei 225 and Topix are still up more than 27 percent this year, retaining Japan’s position as the best-performing major equity market.

Topix Rise

The Topix may rise to 1,300 by the end of the year, according to the median estimate of 17 strategists surveyed by Bloomberg. The Nikkei 225 may climb to 14,500 in the same period, according to a separate survey.

Earnings for Topix companies will jump 53 percent this fiscal year to 78.85 yen a share, according to analyst estimates compiled by Bloomberg.

Among stocks that rose, the Topix gauge tracking shippers climbed 4.7 percent. A.P. Moeller-Maersk A/S, the world’s largest container line, said it will pool vessels with its two biggest competitors to manage overcapacity and raise unprofitable freight rates.

The alliance will help to stabilize container rates and is positive for Japan’s biggest shipping lines -- Kawasaki Kisen, Nippon Yusen KK and Mitsui O.S.K. Lines Ltd. -- according to a report today by Mizuho Securities Co. analyst Satoru Kunieda.

Shipping shares also jumped as the Baltic Dry Index, a measure of cargo rates, climbed to its highest this year. The gauge has risen in each of the past nine sessions.

SoftBank Advances

SoftBank jumped 4.2 percent to 5,460 yen, the second-biggest support for the Topix. Dish’s decision not to make a new offer for Sprint smooths SoftBank’s path to acquiring the wireless company. Still, Dish will consider other options, the Englewood, Colorado-based company said in a statement.

Astellas gained 4.3 percent to 5,050 yen after Reuters reported Japan’s second-largest drugmaker by market value may sell dermatology assets valued at $500 million to $1 billion.

Among stocks that fell, Tokyo Electric, the utility also known as Tepco, slumped 3.9 percent to 517 yen, the biggest drop on the Nikkei 225. The stock was the second-most actively traded on the Tokyo Stock Exchange first section today.

Tepco detected tritium levels of 500,000 becquerels per liter and strontium levels of 1,000 becquerels per liter at a monitoring well in its turbine complex at the crippled Fukushima Dai-Ichi nuclear power station, it said in a statement. Japan’s nuclear safety guidelines require tritium levels at nuclear plants to remain below 60,000 becquerels per liter and strontium levels to be below 30 becquerels per liter.

Before it's here, it's on the Bloomberg Terminal.