Bloomberg News

Japanese Stocks Snap 4-Day Losing Streak on Europe Optimism

October 06, 2011

Oct. 6 (Bloomberg) -- Japanese stocks rose for the first time in five days on signs that European policy makers will act to contain the region’s sovereign debt crisis, boosting the earnings outlook for Asia’s exporters.

Nissan Motor Co., a carmaker that gets 33 percent of its sales in the U.S. and Canada, gained 4.3 after a U.S. jobs report beat estimates. Dainippon Screen Manufacturing Ltd. led gains among chip-related companies after an index tracking the U.S. semiconductor industry gained for a second day. Sony Corp. rose 4.7 percent after a report the entertainment company got financing from Abu Dhabi’s investment fund to support a bid for EMI Group Ltd., the music label home to the Beatles and Coldplay.

The Nikkei 225 Stock Average rose 1.7 percent to 8,522.02 at the 3 p.m. trading close in Tokyo, snapping a four-day losing streak after French and Belgian officials said they had made progress on a plan to split up troubled lender Dexia SA. The broader Topix index gained 1.5 percent to 736.86.

“The fact that governments are going to address banks like Dexia on a case-by-case basis shows progress is being made to bolster the safety net for banks,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “The economic indicators suggest that the U.S. isn’t in such bad shape. The market has become too pessimistic about the economy.”

Europe Crisis

The Topix lost 10 percent last quarter, the steepest decline since the three months through June 2010, amid slowing U.S. growth and an escalating crisis in Europe. The decline has cut the price of shares on the index to 0.89 times estimated book value, near the lowest since March 2009.

Dexia, a French- and Belgian-owned bank, surged yesterday after Belgian Prime Minister Yves Leterme said the lender’s troubled assets would be pooled into a “bad bank” with government guarantees to protect depositors and a municipal- lending unit.

“Coming to the rescue of a bank is not necessarily a bad deal,” French European Affairs Minister Jean Leonetti said on Canal Plus television.

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The index rose 1.8 percent yesterday in New York after a report showed U.S. employers added 91,000 jobs in September. The figure beat a forecast for 75,000.

Nissan advanced 4.3 percent to 686 yen. Honda Motor Co., which depends on North America for 44 percent of its sales, advanced 1.6 percent to 2,230 yen.

Chip-Related Shares

Dainippon Screen and other semiconductor-related firms gained after the Philadelphia Semiconductor Index, which tracks the performance of 30 industry stocks, rose 3.1 percent yesterday to a one-week high.

Kyoto-based Dainippon Screen, which manufactures chipmaking gear, jumped 6.2 percent to 496 yen. Elpida Memory Inc., the world’s third-largest maker of computer memory, soared 6.6 percent to 500 yen. Sumco Corp., which produces silicon wafers, climbed 5.7 percent.

Sony climbed 4.7 percent to 1,470 yen after the Financial Times reported the firm got financing from Mubadala, Abu Dhabi’s investment fund, to support a bid for EMI.

Japanese stock moves: {TNI JPS MOV BN <GO>} Market map of today’s trading: {TPX <Index> IMAP <GO>} Top stocks news: {TOP STK <GO>} World equity valuations: {WPE <GO>} World equity index monitor: {WEI <GO>} Most-read stock market stories: {MNI STK <GO>} Biggest movers this year: {TPX <Index> MRR 10 <GO>}

--With assistance from Toshiro Hasegawa in Tokyo. Editors: Jason Clenfield, Jim Powell.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net.


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