Stocks in Tokyo extended an 11-week high, capping a second straight weekly gain that has pushed the Topix index close to a bull market, after Bloomberg reported the Bank of Japan is considering steps to provide relief to financial institutions. Banks surged in afternoon trading.
The Topix rose 1 percent to 1,407.50 at the close in Tokyo, reversing losses from before the BOJ report. The measure ended the week 3.4 percent higher to take its gain the past fortnight to more than 9 percent. The Nikkei 225 Stock Average added 1.2 percent to 17,572.49. The yen weakened 0.8 percent to 110.32 per dollar.
The BOJ may consider helping financial institutions by offering a negative rate on some loans, according to people familiar with talks at the central bank. Such a discussion could happen in conjunction with a decision to make a deeper cut to the BOJ’s current reserve rate, which is already in negative territory, said the people, who asked not to be named as the matter is private.
Japanese stocks advanced as investors speculated the selloff amid the yen’s strength has gone too far. Bank shares rebounded from a level last seen during the global equity rout earlier this year.
The Topix index climbed 1.5 percent to 1,298.92 at the break in Tokyo, with about five times as many shares rising as falling. The Nikkei 225 Stock Average added 1.2 percent to 15,937.80. The yen weakened to 108.11 per dollar after climbing for a seventh day on Monday to the strongest since October 2014. The Topix Banks Index, which fell 2.1 percent to its lowest level since Feb. 12 yesterday, rallied 4.5 percent today.
Banks, carmakers and electrical-appliance manufacturers were the biggest boosts to the Topix. Toyota Motor Corp. added 3.2 percent. Mitsubishi UFJ Financial Group Inc., Japan’s largest lender, rose 5.1 percent while Sumitomo Mitsui Financial Group Inc. advanced 4.9 percent.
Yoshinoya Holdings Co. rallied 4.6 percent after the fast-food restaurant chain operator forecast operating profit to more than double in the current fiscal year. Yondoshi Holdings Inc. surged 17 percent after the clothing wholesaler announced full-year operating profit beat its forecast. Lixil Group Corp. fell 3.2 percent after reporting a preliminary full-year net loss of 20 billion yen ($ 185 million). The housing-materials manufacturer had earlier forecast a profit of 5 billion yen.