Japan’s Topix Gains as Financials Climb; Dwango Surges

Japan’s Topix index rose for a third day, after last week closing at its highest since May, as financial shares advanced. Dwango Co. surged.

Consumer-finance firm Aiful Corp. jumped 5.8 percent as brokerages, consumer lenders, insurers and banks were among the best-performing Topix subsectors. Dwango soared 17 percent for a second day of gains after video-game console maker Nintendo Co. bought a stake in the mobile-content company. Baby-care product makers Pigeon Corp. and Unicharm Corp. gained at least 4.2 percent as China pledged to relax the nation’s one-child policy.

The Topix added 0.2 percent to 1,241.67 at the close in Tokyo after falling as much as 0.1 percent. About equal numbers of shares rose and fell, with volume 15 percent above the 30-day average. The Nikkei 225 Stock Average was little changed at 15,164.30. The gauge jumped 7.7 percent last week, its biggest weekly increase since 2009. The yen weakened past 100 per dollar last week and traded at 100.08 today.

“Generally speaking the environment surrounding Japanese shares is good,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees about 11 trillion yen ($110 billion). “There are no big negative catalysts. That said, the yen hasn’t changed from last week’s level of 100 per dollar and there are no new positive factors, either.”

Futures on the Standard & Poor’s 500 Index slipped 0.1 percent today. U.S. stocks capped a sixth straight week of gains on Nov. 15, with the S&P 500 rising 0.4 percent to a record, after Janet Yellen signaled she will continue Federal Reserve stimulus efforts if she is named the bank’s next chairman.

May Peak

The Nikkei 225 surged 80 percent from November 2012 to its highest close in 5 1/2 years on May 22 amid bets Prime Minister Shinzo Abe and the Bank of Japan will lead the country out of deflation. The gauge then slumped 20 percent through June 13 to enter a bear market, before recovering to close last week at its highest since the May peak.

Japanese stocks are poised to surpass this year’s high set in May as a stronger U.S. economy weakens the yen and Prime Minister Shinzo Abe’s reflation policy leads to wage increases, according to BNP Paribas Investment Partners SA and SMBC Nikko Securities Inc.

As earnings season draws to a close, net income doubled at more than 1,280 of the country’s largest listed non-financial firms, according to data compiled by Bloomberg. Companies that made tough decisions about exiting businesses, closing factories and revamping management led corporate earnings last quarter to the highest level since 2007.

Financial Stocks

Financial shares advanced today. Aiful, a consumer lender, jumped 5.8 percent to 474 yen. Nomura Holdings Inc., Japan’s largest brokerage, added 0.9 percent to 797 yen. Sumitomo Mitsui Financial Group Inc., the nation’s second-biggest bank, climbed 1.8 percent to 5,170 yen. Insurer Tokio Marine Holdings Inc. rose 2.4 percent to 3,460 yen.

Dwango soared 17 percent to 2,638 yen, the highest close since July 9, after surging 21 percent on Nov. 15. Nintendo said last week it bought 612,200 shares in the company. The investment was made at the request of Dwango Chairman Nobuo Kawakami for his personal funding needs, Nintendo spokesman Yasuhiro Minagawa said on Nov. 15. Dwango was the most traded Topix stock by value today. Nintendo slid 0.2 percent to 13,040 yen today after climbing 5.2 percent on Nov. 15.

Baby-product makers gained after China pledged to relax its one-child policy as part of the biggest package of economic reforms since the 1990s. China’s Communist Party said it will allow couples to have two children if either parent is an only child. Currently couples are allowed to have a second child if both parents are only children. Pigeon jumped 7.1 percent to 5,150 yen, while Unicharm rose 4.2 percent to 6,520 yen.

Rakuten Surges

Among other shares that rose, Skymark Airlines Inc. advanced 9.2 percent to 357 yen. Skymark, which has a market value of about 33 billion yen, will be moved from the TSE Mothers Market of smaller shares to the Tokyo Exchange’s first section of larger stocks on Nov. 22.

Rakuten Inc., which operates an e-commerce site, jumped 9 percent to close at 1,499 yen after touching a record high.

A gauge tracking aviation stocks fell the most among the 33 industry groups. Japan Airlines Co. slipped 1.5 percent to 5,430 yen. ANA Holdings Inc. slid 1.4 percent to 211 yen.

Shares on the Topix traded at 1.26 times book value today, compared with 2.6 for the S&P 500 and 1.8 for the Stoxx Europe 600 Index on Nov. 15.

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