Japan Shares Jump on Weaker Yen After FBI Statement on Clinton

  • Exporters climb on yen; Suzuki rises on profit forecast lift
  • More than 150 Topix companies scheduled to report earnings

Japanese shares rose as the yen weakened, boosting the outlook for exporters, after the Federal Bureau of Investigation said it’s maintaining an earlier conclusion that Hillary Clinton’s handling of e-mails wasn’t a crime.

The benchmark Topix index climbed the most in almost seven weeks at the close of trading, after posting its worst weekly performance since July. The yen fell the most against the dollar in more than a month and futures on the S&P 500 Index jumped as risk assets made gains globally. Equities slumped last week as the Democratic candidate’s chances of winning the Nov. 8 poll against Republican nominee Donald Trump narrowed when the FBI revealed Oct. 28 it was reopening its investigation into her use of an unauthorized e-mail server.

SecurityPercent ChangePrice
Topix+1.2%1,362.80
Nikkei 225+1.6%17,177.21
Yen-Dollar-1.2%104.38

“The ‘President Trump risk’ has receded, and market sentiment is getting back to normal,” said Toshiyuki Kanayama, a Tokyo-based senior market analyst at Monex Inc. “With the letter from the FBI we’re heading toward the conclusion that there’s no problem over Clinton’s private e-mails. With expectations of increased support for her, it’ll be easier for investors to buy stocks.”

FBI Director James Comey’s announcement at the end of last month that he was reopening the investigation breathed new life into Trump’s candidacy at a time most polls showed Clinton with a wide lead. The race has since tightened, though Clinton maintains a 2.2 percentage-point lead, according to an average of polls by RealClearPolitics. Investors expect the latest news that the FBI was keeping its original findings to help boost Clinton’s chances.

The Topix has fallen 12 percent this year, making Japan the sixth-worst performing developed market in 2016. Fears over the Chinese economy and the strengthening yen have weighed on the benchmark, though positive reactions to the Bank of Japan’s most recent policy stances and a weakening currency over the past month have helped the gauge pare some of the losses.

More than 150 Topix companies are scheduled to report earnings on Monday, including Nissan Motor Co., Softbank Group Corp. and Mitsubishi Estate Co.

Exporters including carmakers and electric-appliance producers provided the biggest boosts to the Topix, with Toyota Motor Corp. and Softbank rising 2 percent and 2.1 percent, respectively. About four shares rose for every one that fell on the benchmark index.

Among companies that have reported earnings:

  • Suzuki Motor Corp. climbed 7.2 percent after raising its full-year operating profit forecast 11 percent to 200 billion yen ($1.9 billion). Nomura Holdings Inc. raised its rating on the carmaker to buy from neutral, saying it maintains a favorable view of the growth potential in India’s auto market.

  • Lion Corp. soared 14 percent after the household products maker lifted its full-year operating profit forecast by 12 percent to 23.5 billion yen. 

  • Don Quijote Holdings Co. added 4.4 percent after reporting results for the first quarter that exceeded the discount store operator’s forecast. The company may overshoot its full-year operating profit target, according to Nomura, which sees Don Quijote’s profit reaching records on accelerated store openings on premises vacated by other companies.

  • Alfresa Holdings Corp. slumped 12 percent after cutting its full-year operating profit forecast by 21 percent to 30 billion yen. 

  • Takata Corp. rose 5.6 percent after raising its full-year operating profit forecast by 6.1 percent to 35 billion yen. The Wall Street Journal had earlier reported the beleaguered airbag manufacturer hopes to reach a deal with a bidder by the end of the year.

Futures on the S&P 500 gained 1.2 percent after the underlying equity gauge dropped 0.2 percent on Friday to extend its longest losing streak in more than three decades, as data bolstered speculation interest rates will rise before year-end and investors remained wary before the presidential election.

U.S. non-farm payrolls climbed by 161,000 last month following a 191,000 gain in September that was larger than previously estimated.

“We can’t really look at anything else” until the election’s over, said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd. “The sense of uncertainty a Trump victory would bring is too big, so until that issue comes to a conclusion investors can’t move on anything else.”

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