Japan’s Topix Index rose a second day, reversing earlier declines, as Bridgestone Corp. jumped the most in four years to lead gains after boosting its outlook.
Bridgestone soared 10 percent after saying profit will rise 37 percent this year. Grandy House Corp. advanced 8.3 percent after the homebuilder said it will conduct a 3-for-1 stock split on April 1. JX Holdings Inc. rose 2.8 percent after winning approval for an oil project in the North Sea. Toyota Motor Corp., the world’s biggest carmaker, lost 0.9 percent as the yen strengthened against the dollar.
The Topix climbed 0.1 percent to 963.61 at the close of trading in Tokyo, erasing declines of as much as 0.5 percent. Twice as many stocks rose as fell on the measure. The Nikkei 225 Stock Average sank 0.3 percent to 11,372.34.
“The weaker yen’s benefit on companies like Bridgestone is big,” said Hideyuki Suzuki, a senior market analyst at Tokyo- based brokerage SBI Securities Co. “Japanese stocks are likely to gain as investors turn their attention to fundamentals like corporate earnings and economic data.”
The Topix surged 33 percent since Nov. 14, when national elections were announced, amid optimism Prime Minister Shinzo Abe and the central bank will lead the country out of deflation. The measure is trading at 1.1 times book value, compared with 2.1 for the Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index.
Bridgestone soared 10 percent to 2,820 yen, its highest since May 2006. The tiremaker said net income will jump to 235 billion yen ($2.5 billion) this year, beating the 206 billion yen average estimates of 15 analysts compiled by Bloomberg. The Topix Rubber Products Index rose the most among the gauge’s 33 industry groups.
Grandy House jumped 8.3 percent to 886 yen, its highest close since August 2007 and among the biggest gains on the Topix Index after announcing a share split.
JX Holdings rose 2.8 percent to 543 yen, the third-biggest boost to the Topix. The oil producer won approval from the U.K. for the Mariner oil project in the North Sea.
Exporters limited gains on the Topix after the yen strengthened against the dollar, cutting the outlook for their earnings. The yen rose to 93.70 per dollar after weakening to 93.97 earlier after Finance Minister Taro Aso said the government wasn’t considering changing the central bank law and will not buy foreign bonds through a public-private fund, contradiction Abe’s statements the day before.
Toyota lost 0.9 percent to 4,740 yen. Honda Motor Co., which gets about 80 percent of its revenue outside of Japan, fell 0.4 percent to 3,490 yen. Canon Inc., the world’s biggest camera maker, lost 0.5 percent to 3,295 yen.
Abe told parliament yesterday that buying foreign bonds “exists as one idea” for monetary policy and the BOJ law may be revised. His election campaign last year proposed a fund to buy foreign bonds, with the BOJ, the Ministry of Finance and private companies participating.
Japanese Chief Cabinet Secretary Yoshihide Suga said today that Abe will consider Bank of Japan nominations after his Feb. 22 summit with President Barack Obama in Washington. BOJ Governor Masaaki Shirakawa is set to step down on March 19.
“There appears to be a rift growing between the Japanese PM and his finance minister,” said Gavin Parry, managing director of Hong Kong-based brokerage Parry International Trading Ltd. “Stocks rebounded on speculation this may have been a move to temper the yen’s weakness ahead of the BOJ appointment. If an Abenomics monk is appointed, we will see further yen weakness.”
The Nikkei Stock Average Volatility Index slipped 0.7 percent to 27.58, indicating traders expect a swing of about 7.9 percent of the benchmark gauge over the next 30 days. Volume on the measure was about 28 percent lower than its 30-day intraday average at the close of trading.
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