Japanese Stocks Rise to Pare Worst Weekly Drop Since September

  • Commodity shares rebound after three days of selling
  • Turnover higher as December futures and options expire

Japanese stocks rose, halting a three-day slide after a selloff in commodity prices sent equities toward the biggest weekly drop in three months.

The Topix index climbed 0.6 percent to 1,549.51 at the close in Tokyo. The index finished the week with a 1.6 percent decline, its worst performance since early September. The Nikkei 225 Stock Average added 1 percent Friday to 19,230.48. The advance came as shares in the U.S. rebounded from one-month lows, though gains were limited amid a lack of positive catalysts and as oil resumed falling.

“We had a severe selloff, so now we’re seeing a bit of a comeback,” said Yoshinori Shigemi, a global market strategist in Tokyo at JPMorgan Asset Management. “But rather than buying with confidence, concern seems to be heightening among investors. The idea that we’re unlikely to see a rebound in oil prices anytime soon has probably taken more than a few people by surprise.”

Oil fell this week to its lowest in six years following OPEC’s decision last Friday to abandon output targets. That encouraged selling in raw materials such as copper and iron ore, which in turn dragged shares of commodity producers lower. Miners and iron and steel companies led losses among the Topix’s 33 industry groups this week. Both groups rebounded Friday, with iron and steel shares rallying 1.3 percent.

Performance this week

Yodogawa Steel Works Ltd. jumped 2.7 percent, rebounding after three days of losses. JGC Corp., which provides services to oil firms, rose 1.2 percent, reducing its decline for the week to 9.5 percent.

E-mini futures on the Standard & Poor’s 500 Index rose 0.2 percent, after the underlying measure pared a gain of as much as 1 percent on Thursday in the last 90 minutes of the session to close up 0.2 percent. Beaten-down energy companies climbed for a second day from their lowest level since September, while airlines boosted industrial shares.

U.S. data expected Friday on retail sales and producer prices will probably show stronger growth for November, according to economists surveyed by Bloomberg. Traders are awaiting next week’s decision by the Federal Reserve on interest rates, pricing in a 76 percent chance the central bank will raise borrowing costs after its meeting on Dec. 16.

“It’s difficult for shares to move much ahead of the Federal Reserve meeting,” Hitoshi Asaoka, Tokyo-based senior strategist at Mizuho Trust & Banking Co., said by phone. “I expect the market to continue to be unstable.”

SQ, Movers

Trading Friday also reflected the settlement price of futures and options, also known as the special quotation. December contracts on the Nikkei 225 settled at 18,943.54. Volume on the index was 24 percent above the 30-day average.

Gumi Inc. sank 13 percent after posting a first-half operating loss of 1.5 billion yen and forecasting it will lose another 1 billion in the third quarter. Shares in the smartphone-game developer have lost more than two-thirds of their value since listing a year ago.

Drugmakers led gains among the Topix’s industry groups on Friday after Nomura Holdings Inc. recommended buying Ono Pharmaceutical Co., citing a positive outlook for cancer-treating drugs and sending shares soaring 7.1 percent.

Kikkoman Corp. added 1.5 percent after Goldman Sachs Group Inc. raised its rating on the soy-sauce producer. The brokerage cited a recovery in domestic earnings and a strengthening of corporate governance for the upgrade.

Sharp Corp. climbed 1.6 percent after TV Asahi reported the troubled displayed-maker may receive additional financial support from its main lenders.

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