Topix Rises a Fourth Day Led by Japan Drugmakers, Food Producers

Japan’s Topix index rose for a fourth day as gains by drugmakers and food producers countered a drop by steel companies and financial shares.

Ono Pharmaceutical Co. jumped 11 percent to be the single biggest boost to the Topix index after Credit Suisse Group AG raised its investment rating on the stock. Alps Electric Co. surged 5 percent after the electronic parts maker was upgraded by Morgan Stanley. Sharp Corp. tumbled 3.5 percent after a report it plans to sell shares and seek investment from key lenders. Steel producer JFE Holdings Inc. slumped 3.6 percent as Nomura Holdings Inc. cut its rating on the stock. The Topix Banks Index dropped 0.5 percent after gaining for six weeks.

The Topix added 0.1 percent to 1,526.83 at the close in Tokyo, to again close at the highest level since December 2007. The Nikkei 225 Stock Average slipped 0.1 percent to 18,815.16. The yen strengthened 0.4 percent to 119.66 per dollar after three days of losses.

“Half of the investors are waiting for a pullback to buy and the other half are just buying,” said Andrew Clarke, director of trading at Hong Kong brokerage Mirabaud Asia Ltd. “The longer trend is up on earnings expectations, but in the near-term, because the market has done well, the expectation of some profit taking is normal and healthy.”

U.S. Futures

Futures on the Standard & Poor’s 500 Index lost 0.1 percent after the underlying U.S. gauge added 0.6 percent in New York on Monday as a Commerce Department a report showed purchases adjusted for inflation rose 0.3 percent in January after falling 0.1 percent the prior month.

The spending report drove gains in the dollar against the yen as speculation increased that the Federal Reserve will raise interest rates before year end. Fed Chair Janet Yellen said last week the timing of any increase in borrowing costs will depend on economic data.

“The expansion in U.S. consumer spending is having some effect on the yen, which should be a tailwind for Japanese stocks,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo, said by phone. “Finance related stocks will probably continue to take a breather.”

Ono Pharmaceutical jumped 11 percent to 13,140 yen. Credit Suisse boosted its rating on the stock to outperform from neutral, and raised its target price to 18,000 yen from 12,000 yen.

Alps Electric surged 5 percent to 2,842 yen, the biggest gain on the Nikkei 225. Morgan Stanley raised the investment rating on the stock to overweight from equalweight,citing continued improvement in its product mix as smartphone camera-actuator sales continue to grow.

Sharp tumbled 3.5 percent to 245 yen on a report in the Nikkei newspaper that the company will seek investment from its lenders, including a 150 billion yen ($1.25 billion) debt-for-equity swap. Sharp said it is considering options to restructure operations and no decision has been made.

JFE slid 3.6 percent to 2,862.5 yen as the Topix Iron & Steel Index led declines among the 33 industry groups on the broader gauge. Nomura downgraded the stock to neutral from buy.

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