Topix Gains, Led by Metal Producers, as Investors Weigh Earnings

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Japanese shares rose for a fourth day, led by metal producers, as investors weighed corporate earnings.

Daiki Aluminium Industry Co. soared 8.3 percent after forecasting higher profit. Nintendo Co. added 6.8 percent after DeNA Co. said its first game app developed in partnership with the console maker will be released by year-end. Daio Paper Corp. slumped 9.3 percent as it projected a drop in net income. Yokogawa Electric Corp., which makes factory automation equipment, dropped 5.3 percent after its outlook for operating profit missed analyst estimates.

The Topix index climbed 0.1 percent to 1,604.21 at the close of trading in Tokyo, erasing a 0.8 percent loss. Volume on the measure was about 23 percent above the 30-day average. The Nikkei 225 Stock Average gained 0.7 percent to 19,764.72.

“Expectations for a recovery in Japan’s economy as well as earnings are supporting the market,” said Yoshihiro Ito, chief strategist at Okasan Online Securities Co. “Foreign issues, such as the rise in Europe’s bond yields” are limiting gains in stocks, he said.

U.S. and German benchmark bond rates are close to 2015 highs after rebounding oil, signs of price growth in the euro area and Federal Reserve reminders that it may raise interest rates from near zero at any meeting fueled a global debt selloff.

Global Bonds

The Standard & Poor’s 500 Index slid 0.3 percent on Tuesday in New York, declining for a second day, after a slump that erased more than $450 billion in value from the global bond market. The Stoxx Europe 600 Index lost 1.3 percent. E-mini futures on the S&P 500 added 0.3 percent Wednesday.

“The market focus is all about bonds right now,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $124 billion. “The selloff in bonds initially leads to uncertainty about the outlook, and this gets investors nervous.”

Nissan Motor Co., Sumitomo Mitsui Financial Group, Konica Minolta Inc., Daiwa House Industry Co. and Screen Holdings Ltd. are among companies reporting earnings Wednesday in Tokyo. Of the Topix companies that have posted results this season and for which Bloomberg has estimates, 49 percent have posted better-than-expected profits, down from 67 percent in the previous period. Some 56 percent beat revenue estimates, up from 53 percent.

Metal Producers

The Topix Nonferrous Metals Index gained 2.9 percent, leading gains on the broader gauge. Daiki Aluminium jumped 8.3 percent after forecasting net income will rise 9.4 percent.

Nintendo gained 6.8 percent, the biggest boost on the Topix. The company and DeNA are developing their first game application to be released by the end of this calendar year, said DeNA, whose shares added 3.6 percent.

The Topix Pulp & Paper Index slumped 2.9 percent, falling most among the broader gauge’s 33 industry groups. Daio Paper dropped 9.3 percent after saying a net income will decline 24 percent to 10 billion yen.

Yokogawa Electric lost 5.3 percent, the second-biggest loss on the Nikkei 225. The company forecast operating profit of 33 billion yen, compared with analysts’ 37.9 billion yen estimate.

Trade Surplus

Japan’s current-account surplus in March widened to the biggest since 2008, helped by an improvement in the trade balance and increased income from overseas.

Japan had a 2.8 trillion yen ($23 billion dollars) surplus in its broadest measure of trade, the finance ministry said on Wednesday. The result was wider than a median estimate of 2.1 trillion yen in a Bloomberg survey of economists.