Bloomberg News

Japan Stocks Gain Second Day as Europe Shows Signs of Agreement

September 28, 2011

Sept. 28 (Bloomberg) -- Japanese stocks advanced for a second day, with the Topix index extending a rebound from a 2 ½- year low, after Greece made progress in meeting conditions for more aid and Germany vowed to support the debt-laden country.

Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest publicly traded lender, advanced 3.4 percent. Sony Corp., which earns more than a quarter of its sales in Europe, rose 1.9 percent. Mitsui Fudosan Co. and other developers gained after Credit Suisse Group AG said government policies to support home purchase should boost the sector.

The Topix index advanced 0.7 percent to 754.07 at the 3 p.m. close in Tokyo after German Chancellor Angela Merkel signaled support for Greece, saying, “Germany is ready to offer all kinds of help that is needed.” The Nikkei 225 Stock Average pared gains in the final minutes of trading after a report showed France’s gross domestic product failed to grow last quarter, reigniting concern Europe’s debt crisis has damped growth in one of Asia’s biggest markets.

“Investors have no idea whether Greece’s debt problem will really be solved,” said Hisakazu Amano, who helps oversee the equivalent of $29 billion at Tokyo-based T&D Asset Management Co. “The European Union as a whole supports measures to help Greece, but voters in Germany and other countries may not want to put money into it.”

New Divisions?

In New York, the Standard & Poor’s 500 Index pared gains yesterday in the last hour of trading after the Financial Times quoted unnamed European officials as saying new division may have emerged over the terms of Greece’s bailout, with as many as seven of the euro-area’s 17 members arguing for private creditors to take a bigger writedown on Greek bond holdings. Futures on the S&P 500 gained 0.2 percent today.

Greek Prime Minister George Papandreou yesterday won parliamentary backing for a property tax to meet deficit- reduction targets that Europe has set as a condition for providing more bailout money. Merkel, who spoke before meeting Papandreou for dinner, said she had heard Greece was on track to meet its part of the bargain.

“Europeans finally get it,” Pacific Investment Management Co.’s Mohamed El-Erian said in a radio interview interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “They recognize they have deep problems and they recognize they need to do something about it.”

Banks Rise

Japanese lenders advanced in Tokyo. Sumitomo Mitsui Financial Group, whose shares have plunged 25 percent this year, jumped 3.4 percent to 2,170 yen. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender and a large holder of European bonds, rose 3 percent to 347 yen.

The Nikkei 225 pared gains today after the Paris-based statistics office Insee said France’s gross domestic product was unchanged in the three-month through June.

Sony closed the day up 1.9 percent to 1,503 yen, after earlier gaining as much as 2.6 percent. Mazda Motor Corp., Japan’s second-biggest car exporter, pared gains of as much 5.4 percent before closing up 3.4 percent at 152 yen.

Gains in Japanese stocks were also limited today after 921 of the 1,664 companies listed on the Topix went ex-dividend. The gauge climbed 2.7 percent yesterday amid increasing confidence that Europe will act to solve its debt crisis and as investors bought shares on the last day they would be entitled to receive dividends for more than half the companies in the index.

Real estate developers gained after Credit Suisse said low interest rates and an extension of government policies to support home buying through 2012 may boost demand for property. Mitsui Fudosan, Japan’s largest developer by revenue, advanced 4.7 percent to 1,209 yen. Smaller Mitsubishi Estate Co. climbed 4.1 percent to 1,242 yen.

--With assistance from Masaaki Iwamoto in Tokyo. Editors: Jason Clenfield, John McCluskey.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.


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