Japan’s Stocks Rise on Earnings as Trump Win Divides Market

Alice French and Yasutaka Tamura
·1-min read

(Bloomberg) -- Japan’s Topix Index climbed, driven by strong corporate earnings and share buybacks. Donald Trump’s presidential victory in the US buoyed financial stocks, boosting the broader gauge, but weighed on semiconductor-related shares, dragging the Nikkei 225 lower.

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The Topix closed up 1%, with textile and construction companies among the biggest gainers as shares of fiber-maker Toray Industries Inc. and condominium builder Taisei Corp. both rose by over 12% after hiking their full-year profit forecasts and announcing share buybacks.

Insurers and export-oriented stocks, including automakers, were also among the biggest drivers of the Topix’s rise, boosted by higher US long-term yields overnight and a weaker yen following Trump’s presidential victory.

“Investors expect Trump to cut taxes and keep interest rates high, which is reflecting positively on Japan’s financial stocks,” said Tomo Kinoshita, global market strategist at Invesco Management Japan. “The ‘Trump trade’ is driving stock buying in Japan today,” he added.

Japan’s Nikkei 225 Stock Average, however, dropped 0.3% Thursday, weighed by chip-related stocks on concerns Trump might impose tougher trade policies on China. Semiconductor stocks were among the worst performers on the blue-chip gauge with Lasertec Corp. and Disco Corp. sliding at least 4%.

“There is concern about how Trump’s policies, including export curbs, will affect chip equipment makers with high China exposure,” said Ikuo Mitsui, a fund manager at Aizawa Securities Co.

Disappointing corporate profit guidance further pressured Japan’s tech stocks, with chip-device maker Minebea Mitsumi Inc. tumbling as much as 8.9% as its revised full-year net income forecast missed analyst estimates.

--With assistance from Momoka Yokoyama.

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