Japanese Stocks Rise Most in Three Weeks as Yen Extends Declines

  • Topix rises most since April 19 with 8 shares up for each down
  • Asahi Glass, Lion and NH Foods surge while Takata tumbles

Japanese shares rose by the most in three weeks as the yen extended its decline, boosting the profit outlook for exporters, and investors bought stocks in companies posting positive earning results.

The Topix index climbed 2.2 percent to 1,334.90 at the close in Tokyo, the most since April 19, with almost eight shares rising for each that fell. The Nikkei 225 Stock Average added 2.2 percent to 16,565.19. The yen fell 0.4 percent to 108.72 per dollar, after weakening 1.1 percent on Monday as speculation mounted the Federal Reserve is still on course to raise interest rates this year.

“The weakening yen is acting as a boost to stocks,” said Yoshihiro Okumura, general manager at Chiba-Gin Asset Management Co. in Tokyo. “We’re seeing some risk-on moves overall. The key going forward is whether we’ll get a sense that all the negative earnings are over with now.”

Exporter Toyota Motor Corp. was the biggest boost to the Topix, rising 2.2 percent. Consumer-finance shares, insurers and glass producers led gains among the 33 Topix industry groups.

Company Earnings

Some 212 companies on the Topix report earnings results on Tuesday. Trading company Mitsui & Co. slipped 1.9 percent after posting a net loss of 83.4 billion yen in the year ended March. Industrial manufacturer IHI Corp. lost 3.3 percent after forecasting profit that missed analyst estimates. Earnings releases peak on Friday, when more than 400 companies report results.

Asahi Glass Co. jumped 8 percent after saying preliminary profit for the three months ended March 31 surged 91 percent. Household product maker Lion Corp. added 13 percent after forecasting an increase in first-quarter profit, helped by low costs. NH Foods Ltd. advanced 7.3 percent after the sausage maker’s operating profit outlook beat analyst estimates.

“I expect investors to keep buying back,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo. “We’re more likely to see a weakening yen this week. Earnings aren’t as bad as expected.”

Takata Tumbles

Takata Corp. tumbled 7.4 percent after the embattled airbag maker’s latest forecast was for a 13 billion yen ($120 million) annual loss for the year ended in March. That compares with its previous outlook for 5 billion yen in profit. Hamamatsu Photonics KK dropped 6.7 percent after the semiconductor maker cut its operating profit forecast for the year ending September 2016 to 20.4 billion yen from 23.2 billion yen.

Futures on the S&P 500 Index added 0.4 percent. The underlying U.S. equity gauge gained 0.1 percent on Monday, as a rally in health-care shares was offset by declines among commodity producers, while investors awaited a final batch of earnings reports and further clues on prospects for the economy.

China’s consumer prices continued rising at a healthy clip, though still below the government’s target pace, while factory-gate deflation narrowed more than expected.

“The fact that a slight deflationary trend in China seems to have eased is seen favorably,” said Chiba-Gin’s Okumura. “The momentum isn’t strong yet, but we’re seeing signs of things bottoming out. Some investors are starting to pick stocks on this.”

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