Bloomberg News

Nikkei Rises for Sixth Day, Extending Best Post-Quake Win Streak

July 05, 2011

July 5 (Bloomberg) -- Japanese stocks advanced for a sixth day, keeping alive the longest winning streak for the Nikkei 225 Stock Average since the country’s March earthquake and tsunami, as Tokyo Electric Power Co. advanced.

Tokyo Electric climbed 5.1 percent after the utility said a self-contained cooling system is now running properly at its crippled nuclear plant. Bank of Yokohama Ltd. rose 1.5 percent after Nomura Holdings Inc. raised the lender’s rating, saying it was oversold after the March 11 disaster. Askul Corp., an online office equipment retailer, tumbled 8.3 percent after posting a loss because of damage to inventory and warehousing.

The Nikkei 225 rose 0.1 percent to 9,972.46 at the 3 p.m. close in Tokyo, after adding 4 percent in the past five trading days amid optimism Greece will avoid default. Stocks have risen as companies including Toyota Motor Corp. said supply chains are recovering more quickly than anticipated from Japan’s disaster.

The Topix index rose 0.1 percent to 865.18 today. The gauge hovered around the breakeven point after a measure of daily stock winners and losers rose to a level that suggests to some investors the market is overbought. The 25-day Toraku index rose yesterday to 125. A number above 120 indicate shares may have risen too much.

‘Clearly Overheated’

“Japanese stocks are clearly overheating,” said Norihiro Fujito, head of equity research in Tokyo at Mitsubishi UFJ Morgan Stanley Securities Co.

Markets from Tokyo to New York gained in the past week as Greece satisfied European requirements for getting more bailout money, averting a default that the International Monetary Fund said could “spill over,” destabilizing the region’s banking system. Shares also gained after U.S. manufacturing unexpectedly accelerated in June.

“There’s less concern about the global economy,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion. “Investors are feeling some relief about Greece and there’s less concern that the U.S. economy is going to get worse.”

The Standard & Poor’s 500 Index gained 5.6 percent in the five days since June 24, the gauge’s longest winning streak since January. U.S markets were closed yesterday for the Independence Day holiday.

Radioactive Water

Tokyo Electric climbed 5.1 percent to 413 yen today, the biggest gain on the Nikkei 225. The utility said yesterday a self-contained cooling system is operating without interruption at three Fukushima Dai-Ichi reactors damaged in the March disaster. The use of a recirculation system means fresh water doesn’t have to be added, allowing the utility to cut the amount of radioactive water flowing out of the plant.

Insurers and banks, large Tokyo Electric shareholders, were the biggest support for the Topix among its 33 industry groups. Dai-Ichi Life Insurance Co., the utility’s second-largest shareholder, gained 3.1 percent to 123,300 yen. Sumitomo Mitsui Financial Group Inc. rose 0.7 percent to 2,586 yen. One of the bank’s units owns 2.2 percent of Tokyo Electric, according to Bloomberg data.

Bank of Yokohama rose 1.5 percent to 416 yen and Fukuoka Financial Group Inc. advanced 1.8 percent to 349 yen after Nomura raised its investment rating on the regional banks to “buy” from “neutral,” saying they’re cheap. The Topix index that tracks bank shares has fallen 9.4 percent since the March 11 quake, outpacing a 7.1 percent drop on the broader index.

Sakura Report

“Investors are taking another look at bank shares because there’s an expectation loan demand is going to pick up,” said Hisashi Watanabe, a group manager of Securities Investment Department at Meiji Yasuda Life Insurance Co. Watanabe said the quake hasn’t hurt corporate earnings as much as investors had expected and companies will start borrowing and investing more.

Lenders and insurance companies also got a boost after the Bank of Japan yesterday raised its economic assessment for seven of the country’s nine regions, as the nation recovers from its worst earthquake on record. Tohoku, the northern area that was hardest hit, was among regions where conditions are improving, the central bank said yesterday in its quarterly Sakura Report, the equivalent of the U.S. Federal Reserve’s Beige Book.

Among stocks that declined, Askul tumbled 8.3 percent to 1,267 yen, after posting a net loss of 1 billion yen ($13 million) in the fiscal year ended May 20. The online retailer said it booked charges for inventory and warehouses that were damaged by the quake and tsunami.

--Editors: Jason Clenfield, John McCluskey.

To contact the reporters on this story: Norie Kuboyama in Tokyo at; Toshiro Hasegawa in Tokyo at

To contact the editor responsible for this story: Nick Gentle at

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