Japan Stock Market: Japan stocks rise on optimism from companies, but beware of elections

TOKYO: Japanese stocks reversed, ending up marginally higher on Friday as optimism about the outlook for domestic companies outweighed investor caution ahead of the general election.

The average for Nikkei stock rose 0.25% to close at 28,892.69 after losing as much as 1.2% at the start of the session. For the week the index rose 0.3%.

The broader Topix also changed course, gaining 0.08% to 2,001.18.

“The market had a complicated move today, with a sharper-than-expected decline earlier in the day. Investors likely sold stocks in adjst positions ahead of the election,” said Jun Morita, general manager of research at Chibagin Asset Management.

“So far, despite negative factors such as supply chain disruptions and material shortages, Japanese companies have reported positive earnings overall. This has boosted investor confidence.”

The Nikkei made up most of its early losses after Denso, a subsidiary of Toyota Motor, reported robust gains during the session, market participants said.

Denso was up 1.72% while Toyota was up 0.33%.

Keyence rose 5.03% after the electronic application device maker reported a 67% increase in net income for the first half.

Shares in Sony Group, which posted a surprising 1% increase in operating income in the second quarter, rose 1.9%.

Shipping companies rose 7.22% as Mitsui OSK Lines ‘annual forecast exceeded analysts’ expectations.

Market gains have been limited, however, as investors did not place bets until the weekend election, market participants said.

Japan’s ruling Liberal Democratic Party (LDP) faces a battle for its sole majority in the general election, polls on Friday showed.

Panasonic fell 6.2% despite the household electrical appliance maker upping its full-year outlook by 12%.

Tech heavyweight Advantest fell 2.81% as its annual forecast missed consensus.

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