Japanese Shares Swing on Energy Explorers, Paper Makers

Japanese shares swung between gains and losses as energy explorers and glassmakers rose while paper producers and electronics manufacturers declined. Volume was low ahead of a Bank of Japan policy decision.

Japan Petroleum Exploration Co. led mining shares higher as crude-oil prices climbed for a third day. Taiheiyo Cement Corp. increased 2.4 percent. Toyota Motor Corp. fell 0.5 percent, trimming a decline of as much as 1.6 percent, after the yen pared gains against the dollar. Paper maker Oji Holdings Corp. slumped 2.6 percent. Chiyoda Co., which operates shoe stores, sank 7.6 percent after reporting a 7.6 percent decline in first-quarter profit.

The Topix lost 0.4 percent to 1,190.02 at the trading break in Tokyo, after rising as much as 0.2 percent. Volume was 19 percent below the 30-day intraday average. The Nikkei 225 Stock Average slid 0.2 percent to 14,392.76. The BOJ will probably keep bond-buying unchanged as its two-day meeting ends today, according to a Bloomberg survey.

“While there is largely no change expected from the BOJ, the yen is unlikely to strengthen strongly, as there is also a small chance there could be some kind of surprise,” said Yuya Tsuchida, a strategist at Toyo Securities Co. in Tokyo. “But the stronger yen we had this morning has paused now, so that’s positive for the market.”

The Topix gained 4.8 percent last week, bringing its increase over three weeks to more than 12 percent, the most since April 2009. After plunging as much as 18 percent from a May 22 high, the gauge has rebounded amid optimism Prime Minister Shinzo Abe will push through economic reforms following elections on July 21.

BOJ Meeting

The BOJ will leave its bond-buying program unchanged today, according to all 20 economists in a Bloomberg survey. Thirteen of them see no additional easing in the next six months.

The central bank will also discuss upgrading its assessment of the country’s economy by using the word “recover” for the first time in more than two years, people familiar with the bank’s discussions said earlier this month.

“There will be, no doubt, positive comments that there has been further traction and the policies are bearing fruit,” said Stuart Beavis, head of institutional equity derivatives at Vantage Capital Markets in Hong Kong. “But expect no fireworks. Bond purchases will be kept unchanged but Kuroda and team may start to talk regarding increasing the frequency of the said purchases.”

Futures on the Standard & Poor’s 500 Index gained 0.9 percent today. The gauge yesterday closed little changed as investors analyzed minutes from the Federal Reserve’s last meeting for signs of when the central bank might slow the pace of stimulus.

Minutes from the central bank’s June meeting, released yesterday in Washington, showed that while several members judged a reduction in asset purchases “would likely soon be warranted,” many officials want to see more signs employment is picking up before reducing bond purchases.

The Topix traded at 1.27 times book value yesterday, compared with 2.44 times for the S&P 500 and 1.66 times for the Stoxx Europe 600 Index. The gauge’s 30-day historic volatility was at 34.97 today, retreating from its July 2 high of 43.22.

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