Japan Stocks Rise Second Day This Week as Utilities Advance

Japan’s Topix index closed higher for a second day this week, rallying in late trading after fluctuating throughout the day. Utilities advanced and energy explorers fell.

Kyushu Electric Power Co. surged 3.1 percent after regulators said they will begin inspections at the utility’s nuclear plant next week, raising prospects of a restart later this year. Nippon Telegraph & Telephone Corp. was the biggest contributor to gains on the Topix after Barclays Plc raised its rating on the stock. Toray Industries Inc. led textile makers higher. Toyo Engineering Corp. slumped 15 percent as the construction firm said its Brazilian business will post a loss. Inpex Corp., Japan’s largest oil explorer, fell 1.2 percent.

The Topix rose 0.3 percent to 1,592.01 at the close in Tokyo, reversing losses of as much as 0.7 percent. The Nikkei 225 Stock Average added 0.2 percent to 19,746.20.

“In dollar terms, Japanese stocks have been top in class this year and as foreign investors who missed out try to catch up, it should be quite easy for this market to keep gaining,” said Gentoku Kiyokawa, Tokyo-based director of the investment management department at BNP Paribas Investment Partners. “Given the swelling expectations, stocks aren’t exactly cheap at the moment, but over the medium term there aren’t any problems.”

Relative Strength

The Topix’s relative strength index was at 75 on Tuesday, above the 70 level some traders say indicates shares have risen too fast and are poised to drop.

Kyushu Electric jumped 3.1 percent to 1,127 yen after the Nuclear Regulatory Authority said yesterday it’ll begin pre-operation inspections at the utility’s Sendai No. 1 plant on March 30. The move comes after the local government gave a green light to restarting operations in November.

Nippon Telegraph jumped 2.5 percent to 7,660 yen after Barclays raised the stock to overweight from equalweight. The brokerage increased its price target by 37 percent to 8,900 yen.

Textile makers were the biggest gainers in the Topix, with Toray Industries leading with a 2.9 percent advance to 1,051.5 yen, its highest close in nearly nine years. Polyester manufacturer Teijin Ltd. added 3 percent to 415 yen.

Most pharmaceutical companies fell. Eisai Co. tumbled 5.4 percent to 9,050 yen amid profit-taking after the drugmaker surged 30 percent over the past two days. Santen Pharmaceutical Co. was the standout in the group, jumping 7.6 percent to 9,050 yen after raising its profit forecast and dividend.

Toyo Engineering dropped 15 percent to 335 yen after saying its wholly-owned Brazilian subsidiary suffered operational difficulties and cost overruns that will result in a loss of 17 billion yen ($142 million).

Inpex fell 1.2 percent to 1,347 yen as energy explorers led declines on the Topix.

U.S. Shares

E-mini futures on the Standard & Poor’s 500 Index were little changed after the underlying equity measure lost 0.6 percent on Tuesday in New York as a report on consumer prices showed signs inflation is picking up.

The cost of living in the U.S., excluding food and fuel, rose 0.2 percent in February, the first gain in four months, as fuel costs stabilized. Federal Reserve Chair Janet Yellen signaled last week that the central bank is in no hurry to raise interest rates after policy makers dropped a pledge to be patient on tightening monetary policy.

(An earlier version of this story was corrected to amend a timeframe error in the headline.)

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