Japanese Stocks Gain on Light Volume as Defensive Shares Rise

  • Trading volume was 23 percent below the 30-day average
  • All but one of the 33 industry groups on the Topix advances

Japanese shares rose, extending a rally to a second day, as agricultural stocks and drugmakers led the advance on light volume.

The Topix index climbed 0.9 percent to 1,543.39 at the close of trading in Tokyo, bringing its two-day increase to 1.8 percent. More than five shares rose for each that fell, with volume about 23 percent below the 30-day average. The measure posted its biggest gain since Dec. 17 on Monday on the lowest turnover in a year. The Nikkei 225 Stock Average added 0.6 percent to 18,982.23. The yen traded little changed at 120.34 per dollar after falling for the first time in five days yesterday.

“Investors are trying to figure out which direction the global economy is headed,” said Nobuhiko Kuramochi, head of investment information at Mizuho Securities Co. Because investors are unsure on economic fundamentals, "defensive sectors are being favored over cyclical ones."

Fishing and agricultural stocks advanced with drugmakers. Seafood producer Nippon Suisan Kaisha Ltd. rose 6.1 percent. Ono Pharmaceutical Co. added 1.6 percent. Alpine Electronics Inc. jumped 8.1 percent after Nomura Holdings Co. raised its rating on the car audio maker. Iron and steel companies made up the only sector to drop in the Topix.

Toshiba Corp. jumped 2.7 percent after reports the company is seeking its second credit line from banks in three months, aiming to gain access to an additional 300 billion yen ($2.5 billion) as it faces mounting costs from an accounting scandal that has led to layoffs and asset sales. The stock surged 4.3 percent on Monday after a 23 percent plunge last week.

U.S. Futures

E-mini futures on the Standard & Poor’s 500 Index gained 0.1 percent. The underlying measure dropped 0.2 percent on Monday after resuming trading following a Christmas holiday. Energy companies took up their familiar role as the market’s worst performers, while gains in Amazon.com Inc. and Walt Disney Co. helped mute declines.

Oil led a retreat among commodities Monday, sliding 3.4 percent from a three-week high as Iran repeated its goal of boosting exports after sanctions on the country are lifted. A drop in Chinese industrial profits also weighed on sentiment toward raw materials.

“We saw the lowest turnover this year again yesterday, but I expect that to improve today,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo, said by phone. “That said, it’ll be difficult to see much of a direction in the market."

The Shanghai Composite Index posted its biggest drop in a month yesterday as declining earnings added to concern looming changes to the country’s listing regime and the expiration of a share-sale ban will hurt demand for its stocks. The gauge gained 0.3 percent in Tuesday trading.

“Movement in Chinese shares will continue to have an effect on other markets,” Matsuno said.

The Topix index is headed for an 9.4 percent gain this quarter and an 9.7 percent advance this year, its fourth consecutive annual increase. The measure is still 8.7 percent below its peak in August after China’s shock currency devaluation and the specter of Federal Reserve interest rate hikes sparked a global equity selloff.

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