Japanese Stocks Rebound Ahead of Fed Meeting as Carmakers Soar

  • Suzuki surges after Nikkei reports planned Toyota alliance
  • Apple suppliers mixed after iPhone maker forecasts sales drop

Japan’s stocks rebounded, following U.S. equities higher, as consumer lenders led gains ahead of a monetary policy decision by the Federal Reserve and carmakers advanced on reports of alliances in the industry.

The Topix index jumped 3 percent to 1,400.70 at the close in Tokyo, with all of its 33 industry groups gaining. The gauge slumped 2.3 percent on Tuesday. The Nikkei 225 Stock Average climbed 2.7 percent to 17,163.92. Investors are awaiting the result of the Fed’s first meeting since financial turmoil began this year and Friday’s policy decision from the Bank of Japan.

 “We’re running out of reasons to keep selling,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd. “Rather than expecting any outright action from the Fed, investors are looking at what, if any, implications the recent market volatility will have on their scheduled rate increases.”

The U.S. central bank is widely expected to leave the target for the federal funds rate unchanged at the end of its two-day meeting on Wednesday. Since it announced on Dec. 16 it was raising the benchmark rate for the first time in nearly a decade and forecasting four more hikes for 2016, global stock markets and oil prices have plunged, with Morgan Stanley economists now estimating that financial conditions have already tightened by the equivalent of four additional increases. 

Automakers surged in Tokyo on Wednesday, with Suzuki Motor Corp. jumping 11 percent after the Nikkei newspaper reported Toyota Motor Corp. may align with the automaker to better compete in emerging markets, including India. Toyota rose 3.8 percent even as both companies denied they are in talks. Daihatsu Motor Co. soared 16 percent, the most since 1999, after Toyota said it’s considering a buyout offer to take full control of the minivan manufacturer.

E-mini futures on the Standard & Poor’s 500 Index dropped 0.3 percent after the underlying measure advanced 1.4 percent Tuesday amid better-than-forecast earnings by companies from 3M Co. to Coach Inc. Futures declined as crude oil slid back below $31 and Apple Inc. -- the largest member of the index -- forecast a sales decline for the first time in more than a decade amid slowing growth in China and other emerging markets.

Asian suppliers to the Cupertino-based iPhone maker underperformed the broader market. Alps Electric Co. fell 1.4 percent, while Murata Manufacturing Co. added 0.6 percent.

Sprint Recovery

SoftBank Group Corp. jumped 7 percent after its U.S. subsidiary Sprint Corp. posted a smaller-than-expected quarterly loss and grew its cash reserves, providing relief to investors and sending shares surging 19 percent in U.S. trading.

Sumitomo Mitsui Financial Group Inc. rose 5.1 percent after quarterly profit unexpectedly rose as gains from sales of its shareholdings and lower bad-debt costs cushioned it from declining loan and bond-trading income.

Energy stocks were among the biggest gainers of the 33 Topix industry groups after crude oil in New York added 3.7 percent on Tuesday before dipping 0.9 percent on Wednesday. Oil explorer Inpex Corp. jumped 4 percent and K&O Energy Group Inc. surged 4.6 percent.

Short sales made up 43 percent of trading on the Tokyo Stock Exchange as of Tuesday’s close, the highest this year. The reading was close to the historical high of 43.4 percent reached on Sept. 29, which marked the bottom for the market for several months.

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