Japan’s Topix Climbs on Greece as Investors Weigh Yellen RemarksAnna Kitanaka and Nao Sano
Japan’s Topix index rose as Greek lawmakers passed a bailout agreement that keeps the country in the euro and investors weighed comments from Federal Reserve Chair Janet Yellen on the timing of rate increases.
Alps Electric Co. gained 6.5 percent, the most on the Nikkei 225 Stock Average, after Goldman Sachs Group Inc. raised its price target on the stock. Mitsubishi Chemical Holdings Corp. jumped 5.3 percent after saying it’s considering merging its three units. Tasaki & Co. tumbled 7.6 percent after saying it will get a loan to repurchase some shares its parent company plans to sell. Toshiba Corp. sank 1.5 percent after a report the company faces charges of about $3 billion on the accounting scandal.
The Topix climbed 0.9 percent to 1,660.83 at the close of trading in Tokyo, posting a fifth day of gains. The Nikkei 225 advanced 0.7 percent to 20,600.12. The yen lost 0.1 percent to 123.88 per dollar after weakening 0.3 percent on Wednesday. Greece’s vote puts the onus on the ECB and other euro-region governments to deploy more emergency funds that will help Greek banks re-open. Yellen was upbeat on the economy and repeated that the Fed will probably raise its main interest rate this year.
“The Greek problem has dissipated for now,” said Naoki Fujiwara, Tokyo-based chief fund manager at Shinkin Asset Management Co. “Rates overseas effect Japanese stocks, so I’m carefully watching it. Yellen’s speech suggested the rate increase won’t happen in September.”
Futures on the Standard & Poor’s 500 Index added as much as 0.4 percent. The underlying equity measure slipped 0.1 percent on Wednesday.
The first rate increase in almost a decade “will signal how much progress the economy has made in healing from the trauma of the financial crisis,” Yellen, 68, told members of the House Financial Services Committee on Wednesday.
Seeking to reassure investors accustomed to more than six years of near-zero borrowing costs, she emphasized that the timing of liftoff is less important than the subsequent pace of increases, which she said would be gradual. Policy will probably remain “highly accommodative for quite some time,” she said.
“Yellen’s comments are a plus for Japanese stocks,” said Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo. “The biggest risk would be a deterioration in the economic situation that would mean the U.S. couldn’t raise rates.”
Alps Electric gained 6.5 percent, its biggest increase since November. Goldman Sachs boosted its target price on the stock by 12 percent and reiterated its buy rating.
Mitsubishi Chemical added 5.3 percent to close at its highest level since 2008. The company is considering merging units Mitsubishi Chemical Corp., Mitsubishi Plastics and Mitsubishi Rayon into one company.
Tasaki tumbled 7.6 percent after saying it will borrow about 12 billion yen to finance a share buyback as parent Ocean Pearl Investment Ltd. will sell its stake in the cultured pearl producer.
Toshiba dropped 1.5 percent to its lowest close since January. The company at the center of an accounting scandal may face a $3 billion charge, Reuters reported.