Japan's Topix Rises to Cap Best Week Since July Ahead of Fed

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Japan’s Topix index rose after fluctuating for most of the day, to cap the biggest weekly increase in almost two months. The benchmark traded in the smallest range this month as investors awaited next week’s decision on U.S. interest rates.

SoftBank Group Corp. ended down 0.6 percent, having risen as much as 2.9 percent on a Bloomberg report that founder Masayoshi Son considered a management buyout. Residential builder Sekisui House Ltd. advanced 2.7 percent after raising full-year profit forecasts. Insurance companies retreated after floods north of Tokyo destroyed homes and displaced hundreds of thousands of residents. Builder Iida Group Holdings Inc. jumped 9 percent on speculation the floods would lead to more demand for construction.

The Topix rose 0.1 percent to 1,480.23 at the close in Tokyo after trading between losses of 1 percent and gains of 0.6 percent, the smallest range since Aug. 31. The gauge finished the week with a 2.5 percent advance, its best since the week of July 13. The Nikkei 225 Stock Average slipped 0.2 percent to 18,264.22. The yen traded at 120.72 per dollar, weakening for a fifth day. The Standard & Poor’s 500 Index rose on Thursday in light trading a week before the Federal Reserve decides on interest rates.

“It’s hard to make a move before next week’s result,” said Osamu Koizumi, a Tokyo-based executive officer at Meiji Yasuda Asset Management Co. “The Fed will probably defer on raising rates, but the market is pricing in a 20 to 30 percent probability it will happen. If they do go ahead, it will result in a pretty negative reaction as it signals they don’t mind what’s happening in financial markets or the economies of developing countries.”

While futures traders have pared bets for a U.S. rate increase this month to 28 percent, 38 of 78 economists surveyed by Bloomberg still predict the Fed will increase the key rate at its Sept. 16-17 meeting.

SoftBank fell 42 yen to 6,513. It rose earlier after Bloomberg reported founder Son entered talks with at least one overseas lender about a possible management buyout of the mobile carrier, according to people with direct knowledge of the plan.

Insurance companies declined, with MS&AD Insurance Group Holdings Inc. dropping 2.2 percent, after torrential rain triggered severe floods across swathes of land north of Tokyo, according to state broadcaster NHK. More than 700 homes were flooded in Ibaraki and Tochigi prefectures, according to the Fire and Disaster Management Agency.

“MS&AD, which has the largest share of disaster-related insurance, may see its liabilities swell,” said Yusuke Yabumoto, an analyst Mizuho Financial Group Inc.

Builders benefited on speculation the floods will lead to more construction projects, sending Iida Group 9 percent higher. Sekisui House gained 2.7 percent after the home builder beat its half-year targets and lifted its full-year net income forecast.

E-mini futures on the S&P 500 Index rose 0.3 percent after the underlying measure rose 0.5 percent on Thursday, as Apple Inc. led a rally in technology shares.

September futures and options on the Nikkei 225 settled at 18,119.49. Volume on the index was 197 percent above the 30-day average.