(Bloomberg) -- Japanese stocks rose after a key measure of economic sentiment improved and U.S. equities climbed Friday, with gains capped as investors weighed the implications for Prime Minister Shinzo Abe's administration after his ruling party secured the fewest seats ever in a Tokyo assembly election.
Automakers and chemicals companies advanced after the Bank of Japan's Tankan survey Monday showed sentiment among large manufacturers rose to 17 from 12 in the previous three months, beating estimates. Abe's Liberal Democratic Party secured only 23 seats Sunday for the metropolitan assembly in a vote that could be a harbinger for national elections. The Topix index rallied from a 0.8 percent decline Friday after U.S. industrial and consumer discretionary stocks drove the S&P 500 Index higher.
“With the LDP losing more seats than expected in the Tokyo Metropolitan elections, investors are more likely to take on a wait-and-see mood, given its possible effects on national politics going forward,” said Mitsuo Shimizu, deputy general manager at Japan Asia Securities in Tokyo. “The Japanese economy's fundamentals haven't fallen apart. I don't see the market being sold off by any great degree given the selloff at the end of last week as well.”
“U.S. shares are doing fairly well, so unless that starts crumbling I don't expect major moves in Japanese stocks,” said Takahiro Nakano, senior strategist at Asset Management One Co. “We're still waiting for the next reason to move.”
Summary
- Topix +0.2% at 1,614.41 at the close in Tokyo after slipping as much as 0.1%
- Nikkei 225 +0.1% at 20,055.80
- Yen -0.1% to 112.49 per dollar
- ABC Mart -2.9%; Nikkei reports co. is likely to report its first operating profit decline in six years for the March-May quarter
- Altech +2.2%; swings to 1H consolidated operating profit of 123m yen from loss of 130m yen a year earlier
- Daiseki +6.9%; reported 1Q consolidated operating profit +25% y/y to 2.3b yen
- Gakken Holdings +1.4%; to buy back up to 3.79% of shares for 1.16b yen
- Nachi-Fujikoshi +1.9%; 1H operating profit seen up ~20%, Nikkei reports
- Nextage +14%; reported preliminary consolidated 1H operating profit +33% y/y to 1.6b yen
- Nihon Tokushu +12%; rated new buy at Ichiyoshi Research
- Ito Yogyo +5.4% after Tomin First party's win in Tokyo elections
- Sanbio +14%; awarded $20m grant from CIRM for stroke clinical trial
- Tri-Stage -7.3%; reported 1Q consolidated operating profit -26% y/y to 280m yen in year ended May 31
- Unizo Holdings -16%; seeks 12.8b yen from public share sale
- Weathernews -6.8%; reported group operating profit for year ended May 31 -16% y/y to 2.85b yen
For more on Japan markets:
Abe's Mentor Says BOJ Needs Fresh Face as Kuroda Is Out of Ideas
Japan Shippers to Form Venture as Early as This Week After Delay
Yen Erases Gain as Focus Returns to U.S. Data After LDP Defeat
Xi, Abe Get Phone Calls From Trump as North Asia Tensions Rise
Top Japan Quants Analyst Takaaki Yoshino Joins Nissay From Daiwa
To contact the reporters on this story: Yuko Takeo in Tokyo at ytakeo2@bloomberg.net, Nao Sano in Tokyo at nsano3@bloomberg.net.
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Jonathan Annells, Margo Towie
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