Bloomberg News

Japan’s Topix Rises Fifth Day as U.S. Home Sales Lift Sentiment

January 23, 2012

Jan. 23 (Bloomberg) -- Japan’s Topix Index edged higher for a fifth day, its longest winning streak since September, after rising U.S. home sales boosted investor confidence even as Greece struggles to reach a deal with creditors on its debt.

Taiheiyo Cement Corp. climbed 3.7 percent after Nomura Holdings Inc. said demand will rise as the U.S. economic recovery spurs construction. Daiwa Securities Group Inc. and Dai-ichi Life Insurance Co. gained after Bank of America Merrill Lynch raised the sector’s rating. Olympus Corp., which has lost $4 billion in market value amid an accounting scandal, soared 8.2 percent after being allowed to keep its stock market listing.

Japan’s Topix added 0.2 percent to 756.79 at the 3 p.m. close in Tokyo, extending last week’s 2.8 percent advance. The Nikkei 225 Stock Average was little changed at 8,765.90 today after swinging betweens gains and losses.

“People are more willing to buy homes and the housing market can help lift the whole U.S. economy,” said Masaru Hamasaki, Tokyo-based chief strategist at Toyota Asset Management Co., which oversees the equivalent of $24 billion. The Greek negotiations are “an unpleasant topic and the fact they are dragging on is of course a negative, but they have until late March to resolve this.”

Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The gauge added 0.1 percent in New York on Jan. 20, erasing a loss in the final minutes of trading, as banks gained and earnings reports from IBM Corp. and Intel Corp. boosted technology shares.

U.S. Housing

Japanese stocks advanced after sales of previously owned U.S. homes rose for a third month in December to the highest level since January 2011. The increase signals that the U.S. housing market, which triggered the global recession, is entering this year with positive momentum.

Taiheiyo Cement gained 3.7 percent to 169 yen after Nomura raised the stock price estimate for the cement maker to 200 yen from 180 yen, maintaining its “buy” rating. The U.S. market for the building material is poised to recover on rising demand for new housing and infrastructure projects, the brokerage said in a report dated Jan. 20.

Daiwa Securities advanced 2.9 percent to 281 yen, while Dai-ichi Life Insurance rose 2.8 percent to 83,400 yen after Merrill Lynch boosted the sector rating to “ neutral” from “underweight,” citing improving market conditions.

Olympus gained the most on the Nikkei 225, jumping 8.2 percent to 1,297 after the Tokyo Stock Exchange allowed the optics maker to keep its market listing. The bourse fined the company 10 million yen ($130,000) and ordered it to submit annual reports to improve management.

‘There’s Still Time’

In Europe, Greek officials and private creditors continued negotiations on a deal that’s crucial to lowering the country’s debt and freeing up a second round of international aid before it faces a 14.5 billion-euro ($188 million) bond payment on March 20. The two sides are struggling to agree on the interest rate and maturity of new bonds, which would determine losses for investors.

“They still have time,” Toyota Asset’s Hamasaki said. “That means this isn’t going to weight too heavily on the market.”

The Topix tumbled 19 percent last year amid concern U.S. growth is sputtering and Europe’s debt crisis will damage the banking system, damping demand in two of Japan’s biggest export markets. The decline has cut the price of shares on the index to 0.9 times book value. That compares with 2.1 times for the Standard & Poor’s 500 Index in the U.S. and 1.4 times for the Europe Stoxx 600 Index in Europe.

Exporters Fall

Exporters to Europe declined today after the shared currency fell against the yen. Canon Inc., a camera maker that depends on Europe for about a third of its sales, dropped 1.2 percent to 3,390 yen. Shimano Inc., a maker of bicycle parts that counts the region as its biggest market, slid 0.9 percent to 3,690 yen.

The euro weakened to as low as 98.92 yen today in Tokyo, compared with 100.01 yen at the close of trading on Jan. 20, cutting the value of Japanese companies’ sales to Europe. The dollar fell to 76.92 yen today from 77.15 yen.

Oil companies declined after crude prices dropped to a one- month low. Inpex lost 1.8 percent to 506,000 yen and refiner JX Holdings Inc. sank 2.8 percent to 460 yen.

--With assistance from Satoshi Kawano in Tokyo. Editors: Jim Powell, Jason Clenfield.

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

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


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