Japan Shares Post Third Weekly Gain Amid GPIF Optimism

Japan’s Topix index rose, capping a third weekly advance, as investors weighed plans to bring forward an asset allocation review at the country’s biggest pension fund and awaited U.S. jobs data.

Mitsui O.S.K. Lines Ltd. climbed 2.1 percent to pace a gain by shipping companies. Sumco Corp., which makes silicon wafers, surged 11 percent after a report the company’s plants are at full capacity. GS Yuasa Corp. gained 3.7 percent after the battery maker’s target price was raised at Credit Suisse Group AG and Nomura Holdings Inc. SoftBank Corp. was the biggest drag on the Topix, sinking 1.6 percent.

The Topix added 0.2 percent to 1,234.57 at the close in Tokyo, with twice as many shares rising as falling. The gauge climbed 2.8 percent this week. Prime Minister Shinzo Abe asked Norihisa Tamura, the minister who oversees the 128.6 trillion yen ($1.3 trillion) Government Pension Investment Fund, to conduct an early review of its portfolio, Tamura said today.

The move to bring forward GPIF’s portfolio revamp “is good for the market,” said Masaru Hamasaki, a Tokyo-based senior strategist at Sumitomo Mitsui Asset Management Co. “I don’t think the news is enough to make shares surge, but it will help the market to gradually increase.”

Abe asked for the allocation revamp to happen in September or October, the Nikkei newspaper reported today. Tamura said he will instruct GPIF to bring forward the process.

The Nikkei 225 Stock Average was little changed at 15,077.24 and gained 3 percent on the week. SoftBank, which has the second-biggest weighting on the equity gauge, lost 1.6 percent to 7,695 yen. The yen rose 0.1 percent to 102.28 per dollar today after adding 0.3 percent yesterday.

Mitsui, Inpex

Mitsui O.S.K. gained 2.1 percent to 383 yen as the Topix Marine Transportation Index rose the most among the 33 industry groups on the broader gauge. Oil explorer Inpex Corp. gained 1.5 percent to 1,510 yen. Toyota Motor Corp., the world’s biggest carmaker, rose 0.6 percent to 5,869 yen, providing the largest single boost to the Topix.

Sumco surged 11 percent to 914 yen, the most since January 2013. The company is near full capacity at its plants, the Nikkei newspaper reported, citing President Masayuki Hashimoto. The business daily also reported that prices of wafers sold in bulk remain unchanged from the previous quarter and some manufacturers may raise them.

GS Yuasa added 3.7 percent to 622 yen, its highest close in more than seven months. Credit Suisse lifted its target price on the shares to 550 yen from 520 yen, while Nomura boosted its outlook to 600 yen from 550 yen.

Monetary easing and government spending drove a world-beating 51 percent jump for the Topix in 2013. The index fell 5.2 percent this year, the most among 24 developed markets tracked by Bloomberg, amid concern the measures won’t be enough to revive the economy.

Relative Value

The gauge traded at 1.2 times book value today compared with 2.7 for the S&P 500 and 1.9 for the Stoxx Europe 600 Index yesterday. Volume on the Topix was about 7.7 percent higher than the 30-day average today.

“Japanese companies are doing well in terms of earnings, and their valuations are low compared to their peers abroad,” said Akihiro Tsunoda, a senior investment manager at Sompo Japan Nipponkoa Asset Management Co. “So unless there’s some negative catalyst, the market is likely to drift higher.”

(An earlier version of this story corrected the currency conversion for GPIF’s assets under management.)

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