Japan Stocks Fall as Investors Weigh Earnings Before U.S. Jobs

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  • Topix index posts second weekly decline, dropping 3.2%
  • Toyota advances after quarterly profit beat estimates

Japanese shares closed lower after seesawing most of the day, as fishing and insurance stocks led the decline. Volume was thin as investors weighed earnings and awaited U.S. jobs data.

The Topix index slipped 0.2 percent to 1,279.90 at the close in Tokyo after swinging between gains and losses at least 18 times. Trading volume was about 12 percent lower than the 30-day average, with the measure posting a 3.2 percent loss for the week, its second straight weekly decline. The Nikkei 225 Stock Average was little changed. Bank of England Governor Mark Carney announced a stimulus package, including the central bank’s first rate cut in seven years, sending the pound lower against the yen. The U.S. reports on nonfarm payrolls for July later on Friday.

“We’re in a state of wait and see” ahead of the U.S. jobs report, said Masakuni Fujiwara, chief executive officer at VistaMax Fund Advisors Ltd. in Tokyo. Although the BOE’s easing is a positive for global markets, “it’s a reason for the yen to strengthen. In that sense it’s not too supportive for Japanese stocks.”

The Bank of Japan said last week that it will almost double its annual exchange-traded-fund purchases to 6 trillion yen ($59 billion) in an effort to revive the economy. On Thursday, the central bank bought 70.7 billion yen in ETFs, about twice as much as what they bought on Wednesday.

Earnings season continued in Tokyo, with about 250 companies reporting on Friday. Of the firms on the Topix that have reported earnings so far and for which Bloomberg has estimates, 54 percent topped analyst expectations for profit.

About twice the number of shares fell as rose on the Topix. Drugmakers were the biggest drags on the benchmark gauge, while fishing and agricultural shares and insurers fell the most among the 33 industry groups.

  • Gree Inc. sank 8.5 percent after the game maker forecast a 77 percent drop in operating profit for the current quarter. 
  • Toyobo Co. posted the biggest decline on the Nikkei 225, falling 12 percent, after the fiber manufacturer reported a 7.5 percent decline in sales.
  • Toyota Motor Corp., Japan’s largest company, jumped 3 percent after its first-quarter profit beat analyst estimates.
  • Nikon Corp. climbed 4.4 percent. The camera maker reported first-quarter operating profit that was almost double analyst estimates. 
  • Terumo Corp. rose 3.5 percent after the medical-equipment manufacturer’s first-quarter operating profit rose 9.8 percent from the previous year.

The Topix has tumbled 17 percent this year for the second-worst performance of 24 developed markets. The measure has been buffeted by a surging yen as everything from a collapse in oil prices to concern about a slowdown in China and the U.K.’s vote to the leave the European Union prompted investors to buy the currency as a haven. Additional easing by the Bank of Japan and a fresh round of fiscal stimulus unveiled by Prime Minister Shinzo Abe have failed to stem the decline.

Futures on the S&P 500 added 0.1 percent. The underlying measure closed little changed Thursday, as investors looked past increased stimulus by the BOE to Friday’s jobs report for clues on the strength of the U.S. economy.

“We’re waiting for U.S. jobs data,” said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo. “The BOE has taken the stance that they’ll do everything they can in terms of stimulus in the face of uncertainty. An easing situation is more likely to continue across the globe.”