Japan Stocks Rise on First Day of Fiscal Year as Defensives Gain

Updated on
  • Corporate sentiment improves as profits increase on weak yen
  • Goldman lists three factors that could spur foreign demand

Japanese stock benchmarks advanced on their first trading day of the new fiscal year as industries focused on Japan’s domestic economy helped prop up the market.

The Topix rose 0.3 percent, as foodmakers, retailers and telecommunications companies boosted the gauge. Defensive sectors were likely to be bought after an advance in their U.S. counterparts Friday, Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Institute Co., said earlier. Trading volume on the Topix was 10 percent above the 30 day average.

“Short-term investors may be buying the market,” said Masaaki Yamaguchi, an equity market strategist at Nomura Holdings Inc. in Tokyo. “There may be some reversal of the overdone moves to sell last week. Algorithms may have moved too much on news on Trump’s stance on trade -- investors could have priced that in now, starting to buy anew.”

The Tankan index, which measures large manufacturers’ sentiment toward broad conditions, was 12 in the quarter ended March, according to the Bank of Japan’s survey. The measure improved for a second consecutive quarter, but came in below economists’ median estimate of 14. 

Further progress in corporate governance reforms, evidence of a recovery in domestic demand -- particularly in consumption -- and further outperformance in Japanese stocks in dollar terms could be potential catalysts to attract foreign investors back to Japanese stocks, Goldman analysts said in a note.

Summary

  • Topix +0.3% to 1,517.03 at the close
  • Nikkei 225 +0.4% to 18,983.23
  • Yen -0.1 at 111.49 per dollar
  • Solekia +16% after Giken Kogyo chairman Beji Sasaki raises bid for company to 4,500 yen from 3,700 yen
  • Evolable Asia +6.9% after announcing domestic sales tie-up with HIS
  • Zojirushi -9.1% after 1Q operating profit -19% to 4.68b yen
  • Aska Pharmaceutical -7.2% after reporting preliminary full-year net income at 2.7b yen, 25% lower than forecast
  • Toshiba -5.5% after saying it may miss April 11 deadline for filing earnings

For more on Japan markets:
Central Banks Boost Yen Holdings by Most Since at Least 1999
Labor Shortage More Acute in Small Japanese Companies: Chart
Buying Spree in These Tokyo Stocks Unearned to Own Officials
BOJ Cuts Purchase Size Range of 1-3, 3-5 Year JGBs in April

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