Japanese Shares Rise for First Time in Five Days on Weaker Yen

  • Volatility on Nikkei 225 Index falls to lowest close of 2016
  • Nintendo jumps after smartphone game hits 1 million downloads

Japanese shares rose for the first time in five days as a weaker yen boosted the earnings outlook for exporters and higher oil prices drove gains in commodity producers.

The Topix index rose 1.8 percent to 1,369.93 at the close in Tokyo, as all but one of its 33 industry groups rose as trading resumed after a holiday. The measure had fallen for the past two weeks. The Nikkei 225 Stock Average climbed 1.9 percent to 17,048.55, while a gauge of its volatility fell to its lowest since Dec. 30. The yen traded at 111.90 per dollar after retreating 0.4 percent on Monday. U.S. crude maintained gains above $41 a barrel.

“The biggest factor to move Japan’s stock market is the currency right now,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo. “It looks like it’s going to be a good start to the week.”

Carmakers and consumer electronics manufacturers were among the biggest boosts to the Topix, with Toyota Motor Corp. jumping 3.6 percent, the most in more than a month. Toshiba Corp. gained 4.4 percent after saying it expects 100 billion yen ($892 million) in profit in fiscal 2018. Nintendo Co. soared 8.2 percent after its first smartphone game was downloaded more than a million times since being released last week.

Sharp Corp. tumbled 6.5 percent, the most on the Nikkei 225, after a Yomiuri newspaper report that Taiwan’s Hon Hai Precision Industry Co. is seeking to reduce the amount it pays for the struggling Japanese electronics maker.

U.S. Rates

The yen maintained declines following a second day of gains in the Bloomberg Dollar Spot Index, with two Federal Reserve officials floating the prospect of a U.S. interest-rate increase as soon as next month.

Fed Bank of San Francisco President John Williams said in an interview that there is potential for a move in April or June. Atlanta Fed President Dennis Lockhart echoed that sentiment, saying the economy is strong enough to weather another rate increase as early as next month.

Futures on the Standard & Poor’s 500 Index slipped less than 0.1 percent. The underlying gauge edged 0.1 percent higher on Monday while investors assessed a rally that turned equities positive for the year. The measure is heading for the first monthly increase in four months, after worries over China’s slowdown and routs in oil and banks dragged stocks to their lowest levels since 2014.

A recovery in crude oil prices and the willingness of central banks to support global growth has calmed markets following a volatile first six weeks of 2016. While price swings have abated and crude is trading more than 50 percent above this year’s low, investor confidence remains fragile with concern over China’s economic slowdown and the global oil supply glut lingering.

Shares in Japan in Europe, among the best performers of 2015, are instead some of the biggest laggards so far this year as additional stimulus and negative interest rates fail to ignite optimism.

Before it's here, it's on the Bloomberg Terminal.