Bloomberg News

Japan Stocks Climb to Month High as Machinery, Chipmakers Rise

October 13, 2011

Oct. 13 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 Stock Average climbing to its highest close in almost a month, as increased orders boosted machinery makers and chip stocks gained after ASML Holding NV beat earnings estimates.

Fanuc Corp., the world’s biggest maker of controls for machine tools, climbed 3.4 percent. Advantest Corp., the No. 1 maker of chip testers, surged 5.6 percent. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, advanced 2.1 percent after the European Commission called for a “coordinated approach” to recapitalize the region’s banks.

The Nikkei 225 rose 1 percent to 8,823.25, its highest close since Sept. 16. The broader Topix added 0.7 percent to 758.83. Growing confidence that Europe will resolve its debt crisis helped the gauge rebound 4.5 percent since Oct. 5, when it dropped to a low for the year.

“At the very least, there’s less fear that Europe’s debt problem is going to spill over into the financial system,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. “Sentiment has improved.”

The Topix tumbled 16 percent this year amid concern the U.S. would fall into a another recession while Europe teeters on the edge of a crisis like the one that followed the collapse of Lehman Brothers Holdings Inc. in 2008. The slide has cut the price of shares on the index to 0.88 times estimated book value, near the lowest since March 2009.

‘Lehman Shock II’

“There was a lot of fear that we were going to have Lehman Shock Part II but Europe is making progress toward dealing with the crisis,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. “For the moment, there’s a sense that an immediate crisis has been averted.”

Futures on the Standard & Poor’s 500 Index were little changed today. The index advanced 1 percent in New York yesterday. The Stoxx Europe 600 Index climbed 1.7 percent to a two-month high as Olli Rehn, the European Commission’s economic and monetary affairs commissioner, said the debt crisis can be resolved.

Japanese exporters advanced after minutes of a Sept. 20-21 Federal Reserve meeting released yesterday showed Fed officials aren’t ruling out further asset purchases as a way to boost the world’s biggest economy.

Mazda Motor Corp., which depends on North America for about 27 percent of sales, climbed 4.5 percent to 163 yen. Toyota Motor Corp., the world’s largest carmaker, added 0.7 percent to 2,600 yen. Nintendo Co., the maker of Wii game consoles, climbed 3.5 percent to 12,010 yen.

Machinery Makers

Makers of factory equipment increased after a report showed machine tool orders climbed 20 percent in September from a year earlier. On a month-to-month basis, bookings gained for the first time since June.

Fanuc rose 3.4 percent to 11,970 yen. Tsudakoma Corp., a manufacturer of machines used to make textiles, jumped 6 percent to 160 yen. Tsugami Corp., a supplier of precision lathes, surged 9.9 percent to 378 yen.

Semiconductor-related stocks rallied after ASML Holding, Europe’s biggest chip-equipment maker, reported third-quarter net income that surpassed analyst estimates and said fourth- quarter orders will increase.

Advantest climbed 5.6 percent to 889 yen. Tokyo Electron Ltd., Japan’s biggest manufacturer of chip-making gear, rose 1.4 percent to 4,020 yen. Elpida Memory Inc., the world’s third- largest maker of computer memory chips, advanced 4 percent to 552 yen. Sumco Corp., a wafer producer, gained 1.9 percent to 804 yen.

“ASML is forecasting an orders recovery,” said Yumi Nishimura, an analyst at Daiwa Securities Group Inc. “That suggests that the earnings environment in semiconductors will improve.”

‘Coordinated Approach’

Financial advanced after European Commission President Jose Barroso called for the payout of a sixth loan to Greece and a faster start for a permanent rescue fund to address the region’s debt woes. He also pushed for a “coordinated approach” to deliver a “significantly higher capital ratio of highest quality capital” for banks, while offering government funds only as a last resort.

Mitsubishi UFJ rose 2.1 percent to 340 yen. Sumitomo Mitsui Financial Group Inc., Japan’s second-biggest lender, gained 2.6 percent to 2,159 yen.

--With assistance from Shani Raja in Sydney. Editors: Jason Clenfield, Jim Powell.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.

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


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