Japanese Shares Rise in Light Trading as Autos Gain, Yen Drops

Japanese shares climbed in thin trading as car companies provided the biggest boost to the benchmark gauge after the yen halted a five-day rally.

The Topix index rose 0.4 percent to 1,295.67 at the trading close in Tokyo after falling as much 0.2 percent. Volume on the measure was 14 percent below the 30-day average. Nikkei 225 Stock Average rose 0.4 percent. The yen slid 0.3 percent to 100.16 per dollar after recent gains pushed the Japanese currency trading to its strongest level since November 2013.

“Stocks gained just as much as the yen retreated,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. “Because of Japan’s relatively high exposure to export businesses, stocks tend to be more vulnerable to currency swings,” latest of which was triggered by abating expectations for a near term rate hike in the U.S. earlier this week, he added.

The probability of the Federal Reserve raising rates as early as September stood at 20 percent after minutes from its July meeting showed officials were divided over the urgency to raise interest rates again.

The Topix lost 2.1 percent this week, with the gauge tending to weaken after the trading break, as the Bank of Japan decided against buying exchange-traded funds. Investors are questioning when the BOJ will step in again and stem equity declines after it almost doubled its annual target for the securities to 6 trillion yen ($59.8 billion) a year at the end of July.

“Investors have been too reliant on the Bank of Japan to buy exchange-traded funds,” said Hajime Sakai, a fund manager with Mito Securities Co. in Tokyo. “Throughout the week, many were pinning hopes on the BOJ to step in, but the central bank didn’t buy exchange-traded funds yesterday,” even after the Topix fell, he said.

The Topix posted its biggest drop in more than a fortnight on Thursday, as the yen broke through 100 to the dollar.

  • Fujitsu Ltd. jumped 9.3 percent Friday after JPMorgan Chase & Co. upgraded its rating on the company’s stock to overweight from neutral.
  • Hitachi Ltd. advanced 2.1 percent. The company said it won an order for a proton-beam cancer therapy system from the National Cancer Centre Singapore.
  • Toyota Motor Corp. rose 2.1 percent, contributing most to the Topix’s ascent, as most automakers advanced. Honda Motor Co. added 3.5 percent and Mazda Motor Corp. increased 2.3 percent.

Futures on the S&P 500 dropped 0.1 percent. The underlying equity gauge climbed 0.2 percent Thursday as crude prices lifted shares in oil companies.

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