Japan Shares Rise as Investors Weigh U.S. Rates, Await Earnings

  • China GDP, ECB policy meeting, last U.S. debate being watched
  • Canon, Nidec among 350 Topix companies to report next week

Japanese shares rose after fluctuating between gains and loses as investors weighed the prospects of a U.S. interest rate increase and awaited domestic corporate earnings reports.

The benchmark Topix index was 0.3 percent higher at the close of trading in Tokyo, erasing earlier losses of as much as 0.4 percent, as the yen slid against the dollar in Asia. The currency’s drop reversed some of the gains against the greenback in New York Monday after a measure that tracks manufacturers in New York unexpectedly contracted, while Federal Reserve Vice Chairman Stanley Fischer outlined factors holding down growth and U.S. rates. Recent signs pointing to a stronger U.S. economy had boosted bets for a near-term U.S. rate increase, propelling a three-week slide in the yen.

SecurityPercent ChangePrice
Nikkei 225+0.4%16,963.61

Investors also deferred taking risks ahead of data out of China on Wednesday to gauge the strength of the world’s second-biggest economy, a European Central Bank meeting later this week, and the last of the three U.S. presidential debates.

“With overnight strength in the yen, coupled with declines in U.S. and European shares, the Japanese stock market started on a weak note,” said Naoki Fujiwara, chief fund manager with Shinkin Asset Management Co. “But with China GDP coming up, the ECB meeting, and U.S. presidential debate as well as a slew of local corporate earnings reports due next week, investors will find it difficult to make aggressive moves.”

More than 350 Topix companies,  including Canon Inc. and Nidec Corp., are scheduled to post results next week as the quarterly reporting season begins in earnest.

China’s gross domestic product probably expanded 6.7 percent from a year earlier in the three months through September, the same pace as the previous two quarters and smack in the middle of the government’s full-year target pace, according to a Bloomberg survey of economists ahead of a report on Wednesday.

Exporters of electrical appliances were among industry groups that contributed the most to the Topix’s gains, while the Topix Mining Index slid 0.8 percent on lower crude prices. Inpex Corp. lost 0.8 percent and Japan Petroleum Exploration Co. shed 0.7 percent.

  • Marusan Securities Co. slumped 2.6 percent after the company said preliminary operating profit for the six months ended September fell 99 percent from a year ago.
  • Nihon M&A Center Inc., which advises small and medium-sized companies on mergers, soared 7.5 percent. The company said its operating profit for the six months ending September beat forecasts, rising 59 percent. 
  • Cosmo Bio Co., a trader of medical substances, jumped 3.2 percent after the company said it will start a new service relating to high-grade peptides and antibodies.

Futures on the S&P 500 Index climbed 0.4 percent. The underlying equity gauge lost 0.3 percent on Monday as energy shares fell.

Traders are monitoring economic data and rhetoric from policy makers for clues as to the path of U.S. interest rates. The Empire State index declined 6.8 percent this month as analysts projected expansion, while data on U.S. manufacturers signaled recovery. Futures indicate a 66 percent probability the Fed will raise rates by its December meeting, up from around 50 percent as recently as Sept. 27, according to calculations by Bloomberg.

“U.S. data is signaling a combination of growth and a pullback, which isn’t impressive,” said Toshihiko Matsuno, a senior strategist at SMBC Friend Securities Co. in Tokyo.

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