Japan’s Topix Falls After Best Three-Week Gain Since 2009

Japanese shares fell, with the Topix index retreating after its best three-week advance in four years, as homebuilders and developers led losses among the gauge’s 33 industry groups.

Daiwa House Industry Co. slumped 9.4 percent, the most on the Nikkei 225 Stock Average, after the builder said it will sell shares. Fanuc Corp., which supplies robotics to Chinese factories, slid 1.6 percent as Chinese shares fell before the release of inflation data tomorrow. SoftBank Corp. slumped 3.4 percent after its credit rating was cut to junk by Standard & Poor’s. Tokyo Electric Power Co. led gains on the Nikkei 225 as power producers began applying to restart reactors.

The Topix lost 1.4 percent to 1,172.58 at the close in Tokyo. The gauge earlier rose as much as 1.2 percent as the yen fell against the dollar after U.S. data showed payrolls rose by 195,000 workers in June, beating the estimate for a 165,000 gain. The Nikkei 225 slid 1.4 percent to 14,109.34.

“There’s some profit-taking going on now that it seems like all the good news is out,” said Tomomi Yamashita, who helps oversee the equivalent of $5 billion at Shinkin Asset Management Co. in Tokyo. “With the yen briefly strengthening, and shares having risen so quickly, now doesn’t feel like the time to buy.”

The Topix gained 4.8 percent last week, bringing its increase over three weeks to more than 12 percent, the most since April 2009. Shares rose amid a weakening yen and optimism Prime Minister Shinzo Abe will push through economic reforms after upper-house elections on July 21.

Carmakers Fall

Futures on the Standard & Poor’s 500 Index lost 0.1 percent today. The measure rose 1 percent on July 5, the most in three weeks, after the employment data. Economic growth amid monetary stimulus from the Federal Reserve has helped send the S&P 500 up 141 percent from its bear-market low in 2009.

Consumer-electronics producers and carmakers fell after swinging for most of the day as the yen rose and fell versus the dollar. Japan’s currency gained 0.2 percent to 101.03 per dollar as of 3:26 p.m. in Tokyo.

Toyota Motor Corp., the world’s largest carmaker, lost 1 percent to 6,250 yen. Sony Corp., which gets 68 percent of sales abroad, fell 2 percent to 2,152 yen.

Real estate and construction stocks led declines. Daiwa House tumbled 9.4 percent to 1,780 yen. The homebuilder plans to raise as much as 137.9 billion yen ($1.37 billion) in Asia’s biggest share sale this year by a property company. Mitsubishi Estate Co., Japan’s largest developer, fell 4.6 percent to 2,742 yen, the second-biggest fall on the Nikkei 225.

China Concerns

China’s consumer prices probably rose 2.5 percent last month, compared with a 2.1 percent gain in May, according to the median estimate of 31 economists in a Bloomberg survey. China’s second-quarter growth may slow to about 7.5 percent, and June exports may be relatively weak, China Securities Journal reported, citing an unidentified person.

Hong Kong’s Hang Seng Index slid 1.7 percent and China’s Shanghai Composite Index lost 2.4 percent today.

Fanuc, which counts Asia excluding Japan as its biggest market, lost 1.6 percent to 14,540 yen. Komatsu Ltd., a machinery maker that gets 8.3 percent of sales from China, sank 3.1 percent to 2,257 yen.

Junk Status

SoftBank declined 3.4 percent to 5,680 yen, the biggest drag on the Topix. The mobile carrier was cut to junk by S&P after winning approval from the Federal Communications Commission for its $21.6 billion bid to buy Sprint Nextel Corp. The rating was cut to BB+, the highest non-investment grade level, from BBB, S&P said in a statement.

Among stocks that rose, Tokyo Electric, operator of the Fukushima nuclear power plant shuttered after the 2011 disaster, jumped 4.3 percent to 628 yen, leading gains on the Nikkei 225. The utility earlier climbed as much as 15 percent.

Shikoku Electric Power Co. added 0.5 percent to 1,845 yen after applying for safety checks ahead of a request to restart its reactors.

The Topix trades at 1.25 times book value, compared with 2.4 times for the S&P 500 and 1.6 times for the Stoxx Europe 600 Index. The measure’s 30-day historic volatility was at 36.54 today, retreating from its July 2 high of 43.21.

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