Japan Stocks Rise for First Time in Five Days Ahead of BOJ, Fed

Updated on
  • Exporters climb after yen falls following three days of gains
  • Some are expecting the BOJ to add to stimulus, VistaMax says

Stocks in Tokyo rose for the first time in five days as a weaker yen buoyed exporters before central bank meetings in the U.S. and Japan.

The Topix index climbed 0.4 percent to 1,277.11 at the close, rebounding from its lowest level in two months, as investors wait for the Federal Reserve and Bank of Japan’s policy reviews this week. The yen fell 0.2 percent against the dollar following three days of gains amid concern the U.K. will vote to leave the European Union in a June 23 referendum.

“We’re seeing some buying on expectations the BOJ will make a move,” said Masakuni Fujiwara, chief executive officer at VistaMax Fund Advisors Ltd. in Tokyo. “It’s clashing with worries over the U.K. possibly leaving the EU, with the market going back and forth between the positive and negative factors.”

While traders see zero chance of the Fed raising rates on Thursday, investors remain divided over whether the BOJ will add to stimulus. Twenty-eight percent of 40 economists surveyed by Bloomberg project a change from the BOJ as soon as June 16, while 55 percent forecast more easing on July 29.

After four days of losses, some technical indicators were pointing to overselling in the Japanese equity market. The 14-day relative-strength index for the Topix dropped to 33 on Tuesday, close to the 30 level that some traders use as a signal shares have fallen too far.

Major Moves

The Nikkei 225 Stock Average added 0.4 percent to 15,919.58. Insurers, carmakers and electric-appliance manufacturers led gains among the 33 Topix industry groups.

  • Toshiba Corp. surged 7.6 percent, the most on the Nikkei 225, after CLSA Ltd. raised its rating on the electronics manufacturer on an improved outlook for earnings.
  • Among the automakers that rose were Mitsubishi Motors Corp., which climbed 2.1 percent, and Isuzu Motors Ltd., which added 2.7 percent.
  • Tokio Marine Holdings Inc. led gains in the insurance sector with a 2.5 percent increase.
  • Kansai Electric Power Co. slumped 5.6 percent, the biggest drop on the Nikkei 225.

Futures on the S&P 500 Index were little changed. The underlying U.S. equity gauge fell a fourth day on Tuesday, the longest losing streak since February.

More than $2 trillion has been wiped off the value of global equities in the past week as a fifth poll put the U.K.’s “Leave” campaign ahead of “Remain.”

“We can’t do anything on the issue and we just have to wait for the vote patiently,” said Chihiro Ohta, a senior strategist at SMBC Nikko Securities Inc. in Tokyo.