Japan Stocks Rise as Automakers Provide Boost, Yen Pares Gain

(Bloomberg) -- Japanese shares advanced as automakers and electronics producers boosted the Topix index, while investors weighed the international reaction to North Korea’s test launch of an intercontinental ballistic missile.

Toyota Motor Corp. and Subaru Corp. were among the biggest contributors to the benchmark gauge, while Sumco Corp. was the best performer on the Nikkei 225 Stock Average. The yen pared gains of as much as 0.4 percent against the dollar spurred when the U.S. confirmed a rocket launched by North Korea on July 4 was an ICBM, with Secretary of State Rex Tillerson calling it a “new escalation of the threat” that would be brought before the United Nations Security Council. American markets were closed Tuesday for the Independence Day holiday.

“With the yen moving back toward weakness after strengthening over traders focusing on the possibility of North Korean nuclear tests, investors are feeling more relieved,” said Masayuki Otani, chief market strategist at Securities Japan Inc. in Tokyo. “The type of shares investors are looking at has started to change. The previously lagging automakers have been bought, while semiconductor shares have regained some momentum.”

Summary

• Topix +0.6% at 1,618.63 at the close in Tokyo, after declining as much as 0.5%
• Nikkei 225 +0.3% at 20,081.63
• Yen +0.1% at 113.21 per dollar
• Fumakilla +7.8%; pesticide maker rises as Japan’s environment ministry confirmed a queen fire ant was found in the fourth infestation it has discovered to date
• Toyota Motor +1.6%; China June vehicle sales rise 10% y/y to 106,900 units
• Subaru 3.7%; raised to outperform at Macquarie, PT 4,400 yen; raised to overweight at JPMorgan, PT 4,600 yen
• Sumco +5%; Recent gains in wafer prices are likely to accelerate: Deutsche Bank
• Tokyo Electron +2.6%
• Askul +4.4%; full-year operating profit +4.1% y/y to 8.87b yen vs. company forecast for 8.80b yen
• Japan Airport +5%; new outperform at Daiwa, PT 5,750 yen
• Adastria -3.2%; June same-store sales -2.7% y/y
• Ryohin Keikaku +2.9%; June same-store sales +8.8% y/y
• Toyota Boshoku +4.8%, most since Oct. 31; company is overly cautious on its outlook for model and product deterioration, likely to beat its own guidance this fiscal year: CS

For more on Japan markets:
Abe Flies to Brussels in Bid to Seal Japan-EU Free Trade Deal
BOJ’s Output Gap Shows Rising Pressure in Japanese Economy
Japan’s Biggest Banks Eclipsed by Tiny Competitor on Pay: Chart
Yen Gains as Tension Heightens Over North Korea: Inside Japan