Topix Falls From Month High as Railway Stocks Lead Drop

Japan’s Topix index fell after the measure yesterday posted its highest close this month, as the yen strengthened and railway companies led the decline.

A gauge tracking land transportation companies sank 1.2 percent for the biggest drop among the Topix’s 33 industry groups. Mobile carrier SoftBank Corp. slid 1.8 percent, the largest drag on the Topix. Message Co. slumped 5.5 percent after the operator of nursing facilities was downgraded at Ichiyoshi Research Institute Inc. DeNA Co. jumped 3.7 percent after its new game became the top-ranked free Apple Inc. application download in Japan.

The Topix lost 0.5 percent to 1,285.01 at the end of trading in Tokyo after climbing 0.4 percent yesterday to its highest close since July 30. The Nikkei 225 Stock Average slipped 0.6 percent today to 15,521.22, with futures trading in Osaka also declining 0.6 percent as of 3:27 p.m. Japan’s currency rose 0.2 percent to 103.87 per dollar, heading for its first gain in seven days.

“A stronger yen triggered a selloff in the futures and cash markets,” said Yutaka Miura, a senior technical analyst at Mizuho Securities Co. “The fall is a reaction after two weeks of gains.”

The Topix jumped 4.7 percent the past two weeks and is now 1.3 percent away from erasing this year’s loss as investors bet Japan is weathering its sales-tax increase and that the world’s biggest pension fund will buy more domestic shares.

Traded Value

The value of stocks traded on the first section of the Tokyo Stock Exchange was 1.5 trillion yen ($14.7 billion) today, compared with this year’s daily average of about 2 trillion yen. Volume on the Topix was 7 percent lower than its 30-day average today.

The gauge traded at 1.2 times book value today. That compares with multiples of 2.7 for the Standard & Poor’s 500 Index and 1.9 for the Stoxx Europe 600 Index yesterday.

“It was about the time to see a correction because the market lacks momentum amid low turnover,” said Akihiro Tsunoda, a senior investment manager at Sompo Japan Nipponkoa Asset Management Co. “Things are quiet as earnings season is winding down.”

The Topix Land Transportation Index fell 1.2 percent. East Japan Railway Co. sank 2.1 percent to 8,197 yen for the biggest drop on the Nikkei 225. Nankai Electric Railway Co., which serves Osaka and Wakayama, slid 2.8 percent to 514 yen.

SoftBank slid 1.8 percent to 7,261 yen, retreating for the first time in seven days. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, declined 1 percent to 597.8 yen. The two stocks contributed the most to the Topix’s drop.

Message slumped 5.5 percent to 3,865 yen. The Okayama-based company’s stock rating was cut to neutral from buy at Ichiyoshi Research Institute.

Top App

DeNA surged 3.7 percent to 1,324 yen. The company’s Kiritani-san x Bike Run game was the top free Apple iOS application download as of 8 a.m. by an hourly ranking in Tokyo today compared with 454th yesterday, according to researcher App Annie Ltd. The game features celebrity Japanese board-game player and investor Hiroto Kiritani as he rides a bike through obstacles around Tokyo.

Kintetsu Department Store Co. sank 4.8 percent to 355 yen after cutting its full-year operating-profit forecast 45 percent to 4.1 billion yen.

Of the companies on the Topix that released results from the start of July through yesterday and for which Bloomberg had estimates, 57 percent beat earnings expectations.

Record High

Futures on the S&P 500 fell 0.1 percent today. The underlying equity measure rallied 0.5 percent yesterday, briefly surpassing 2,000 for the first time, as corporate deal-making and prospects for economic stimulus in Europe bolstered confidence in the bull market.

Investors also watched geopolitical developments in Ukraine and the Middle East. Russian President Vladimir Putin is set to meet his Ukrainian counterpart, Petro Poroshenko, as tensions flare on the two nations’ border. The U.S. hasn’t decided whether to attack Islamic State targets inside Syria and won’t ask President Bashar al-Assad for permission if it does, a White House spokesman said.

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