Japan’s Topix Rises to Cap Biggest Weekly Advance Since November

Mar 28, 2014 3:57 am ET

March 28 (Bloomberg) -- Japan’s Topix index rose for a fifth day, capping its biggest weekly advance in four months, as consumer lenders and airlines led gains.

Consumer-finance and leasing company Orix Corp. added 4.3 percent. Japan Airlines Co. climbed a second day for the biggest advance among air-transport shares. A Topix gauge tracking brokerages rose 2.4 percent after dropping the most among the broader measure’s 33 industry groups yesterday. Yahoo Japan Corp. plunged 6.4 percent after agreeing to buy parent SoftBank Corp.’s broadband-service provider eAccess Ltd. for 324 billion yen ($3.2 billion). SoftBank slid 1.5 percent.

The Topix increased 0.8 percent to 1,186.52 at the close in Tokyo, after falling as much as 0.7 percent. The gauge’s five- day winning streak is the longest since October. The measure capped a 3.5 percent gain this week, its biggest such gain since the period ended Nov. 15. The Nikkei 225 Stock Average rose 0.5 percent today to 14,696.03.

“There is buying demand after shares fell yesterday when they went ex-dividend,” said Naoki Fujiwara, a Tokyo-based chief fund manager at Shinkin Asset Management Co. “Shares are also undervalued given earnings are projected to rise.”

The Topix closed 0.4 percent higher yesterday after dropping as much as 2 percent as shares of more than 1,400 companies on the 1,777-member index traded without the right to the next dividend payment.

The Topix traded at 1.16 times book value today, compared with 2.59 for the Standard and Poor’s 500 Index and 1.86 for the Stoxx Europe 600 Index yesterday. The Japanese gauge was valued at 1.27 times its net assets at the start of the year. Volume on the Topix was 3.7 percent lower than the 30-day average today.

Consumption Tax

Japan raises its sales tax by three percentage points next week to 8 percent. The world’s third-largest economy is set for a one-quarter contraction from April, according to economists polled by Bloomberg, as spending slows after the levy increase.

Thirty-five percent of economists in a Bloomberg News survey forecast the BOJ will expand monetary stimulus in the April-June quarter, according to a poll conducted Feb. 26 to March 4.

Data today showed consumer prices excluding fresh food, the BOJ’s preferred measure of inflation, rose 1.3 percent in February from a year earlier, matching the median estimate of 30 economists surveyed by Bloomberg News.

The Topix Other Financing Business Index gained 2.8 percent today, the biggest increase among the 33 Topix groups, after falling 0.9 percent yesterday. Orix gained 4.3 percent to 1,420 yen. Credit Saison Co. advanced 2.2 percent to 2,054 yen.

Airlines Advance

Japan Airlines rose 4 percent to 4,995 yen, gaining for a second day after Citigroup Inc. said the carrier’s operating- profit target of 140 billion yen is higher than market assumptions.

ANA Holdings Inc. gained 1.4 percent to 223 yen. The airline yesterday said it will purchase 70 new planes from Boeing Co. and Airbus Group NV.

Among other shares that rose, Sumco Corp. jumped the most on the Nikkei 225 after Citigroup said demand for the company’s silicone wafers is surging. The shares gained 6.1 percent to 803 yen.

Yahoo Japan tumbled 6.4 percent to 514 yen, the lowest since Dec 6. SoftBank slid 1.5 percent to 7,694 yen. Yahoo Japan is paying 80 percent more in cash for eAccess than the 180 billion yen SoftBank paid for the assets at the end of 2012 as it seeks to add bandwidth for users surfing the Web, watching videos and playing games.