Japanese Shares Post Their Biggest Weekly Gain in a Month on Yen

Checking the Health of the Japanese Economy

Japanese shares recorded their biggest weekly gain in a month, following U.S. equities higher as the yen held losses while power producers and agricultural stocks led the advance.

The Topix index added 0.6 percent to 1,323.22 at the close in Tokyo, capping a 3.4 percent increase this week. The measure was closed on Thursday for the Mountain Day holiday. The Nikkei 225 Stock Average climbed 1.1 percent. The yen traded 0.1 percent lower at 102.10 per dollar after dropping 0.7 percent on Thursday. The S&P 500 Index, Dow Jones Industrial Average and Nasdaq Composite Index rose together to record highs for the first time in 16 years amid surprising earnings.

“The yen weakened, albeit by a bit, and it was kind of an all-around buying mood,” said Naoki Fujiwara, chief fund manager with Shinkin Asset Management Co. in Tokyo. “Things aren’t looking too bad for equities now, with the U.S. economy doing not so bad while globally, policies are still skewed toward easing.”

All but six of the 33 industry groups on the Topix rose, with two shares rising for each one that fell. Toyota Motor Corp. provided the single largest boost to the index, ending 0.9 percent higher.

  • Toshiba Corp. climbed 3.8 percent. The company said on Friday it swung to an operating profit of 20.1 billion yen in the June quarter, reversing a loss of 6.55 billion yen for the same period a year ago.
  • Shikoku Electric Power Co. advanced 5.8 percent. The company restarted its Ikata No. 3 nuclear reactor on Friday, with power output expected by Aug. 15 and full capacity being reached by Aug. 22.
  • Japan Display Inc. continued its slump after forecasting an operating loss. The stock slid 6.7 percent, logging a weekly decline of almost 18 percent. The panel maker expects to get tens of billions of yen in loans and loan guarantees from government-backed Innovation Network Corp. of Japan, the Wall Street Journal reported.

Futures on the S&P 500 Index were little changed. The underlying measure gained 0.5 percent in New York, extending this year’s advance to 6.9 percent. The Dow Average and Nasdaq added more than 0.4 percent. The three indexes rose simultaneously to records for the first time since Dec. 31, 1999.

The Bank of Japan bought 72 billion yen ($707 million) in exchange-traded funds Wednesday as part of its annual program to purchase 6 trillion yen in the securities.

The BOJ’s ETF buying makes it difficult for bears to build any momentum, said Yoshinori Ogawa, a senior strategist at Okasan Securities Co. ”Overseas markets continue to be firm, and the move in the yen has calmed,” he said.

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