Bloomberg News

Japan Stocks Rise as Yen Hits 4-Month Low; U.S. Data Improves

February 19, 2012

Feb. 17 (Bloomberg) -- Japanese stocks rose after the yen fell to a four-month low as investment banks including Goldman Sachs Group Inc. projected the currency will continue to slide, and U.S. economic reports beat expectations, boosting the outlook for exporters.

Honda Motor Co., a carmaker that gets almost 85 percent of its sales abroad, rose 2.4 percent. Nikon Corp., a camera maker that counts on Europe for 23 percent of its revenue, climbed 3.9 percent as optimism rose that Greece will secure a debt bailout. Inpex Corp., Japan’s top oil explorer by market value, jumped 4.8 percent after crude prices advanced.

The Nikkei 225 Stock Average rose 1.6 percent to 9,384.17 at 3 p.m. in Tokyo, its highest close since Aug. 4. The broader Topix Index gained 1.3 percent to 810.45, with a weekly gain of 4 percent. More than twice as many shares rose as fell on the equity gauge.

“Japanese company earnings are unlikely to get worse while the yen’s advance against the dollar is reversing and the U.S. economy is recovering,” said Hisakazu Amano, who helps oversee the equivalent of $29 billion at T&D Asset Management Co. in Tokyo. “Uncertainties on European debt issues are subsiding.”

U.S. Data

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The index advanced 1.1 percent in New York yesterday after reports showed Americans filed the fewest claims for jobless benefits since March 2008 and builders broke ground on more houses than expected. Manufacturing in the Philadelphia region expanded this month at the fastest pace in four months as orders and sales rose.

Stocks also advanced after euro-area officials said the European Central Bank is swapping its Greek bonds for new securities to prevent losses in a debt restructuring. European governments are mulling cutting interest rates on emergency loans to Greece and using contributions from the ECB to plug a financing gap in the second bailout for Athens, people familiar with the discussions said.

“It’s a distinct improvement from the fourth quarter last year from the perspective of investor confidence and risk appetite,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “When there’s a bit of relief from the European front, the markets can focus on fundamentals, which seem to be improving by the day.”

Exporters Advance

Honda, Japan’s second-largest carmaker by revenue, gained 2.4 percent to 2,950 yen. Nikon rose 3.9 percent to 2,127 yen.

Exporters extended gains as the yen fell against the dollar, the weakest since Oct. 31. The currency’s slide accelerated as investment banks from Goldman Sachs Group to JP Morgan Chase & Co. today said the yen will continue to weaken after the Bank of Japan unexpectedly expanded an asset-purchase program this week. A weaker yen boosts overseas income for Japanese companies.

The following were among the most active shares in the Japanese market today. Stock symbols are in parentheses after company names.

Oil companies: Inpex (1605 JT) led companies in the sector higher after crude oil for March delivery traded near its highest in six weeks, extending yesterday’s 0.5 percent rise to $102.31 in New York.

Inpex jumped 4.8 percent to 551,000 yen. Japan Petroleum Exploration Co. (1662 JT), the nation’s second-largest oil explorer by market value, gained 2.6 percent to 3,745 yen. Japan Drilling Co. (1606 JT), an offshore exploration contractor, climbed 4.2 percent to 2,701 yen.

Shipping companies: The three biggest companies in the sector declined the most in the 33 Topix industry groups after the Baltic Dry Index, a gauge of cargo rates, yesterday fell 1.1 percent, the biggest drop since Feb. 2.

Nippon Yusen K.K. (9101 JT) slid 1.7 percent to 234 yen. Mitsui O.S.K. Lines Ltd. (9104 JT) fell 1.4 percent to 348 yen, while Kawasaki Kisen Kaisha Ltd. (9107 JT) lost 0.6 percent to 177 yen.

Bridgestone Corp. (5108 JT), the world’s biggest tiremaker by market value, jumped 4 percent to 1,833 yen after saying it expects net income to surge 63 percent to 168 billion yen ($2.1 billion) this year on growing sales. The tire company also said it will spend about 4.7 billion yen to boost production capacity.

Daiwa House Industry Co. (1925 JT), a builder, climbed 3.1 percent to 1,015 yen. Mitsubishi UFJ Morgan Stanley Securities Co. boosted stock’s rating to “outperform” from “neutral,” saying earnings will likely rise next fiscal year on demand for facilities and rental accommodations.

Japan Tobacco Inc. (2914 JT), Asia’s largest cigarette maker by market value, advanced 2.8 percent to 429,000 yen. Citigroup Global Markets Japan Inc. raised the target price on the stock to 520,000 yen from 450,000 yen, maintaining its “buy” rating.

Mitsubishi Corp. (8058 JT), Japan’s biggest commodity supplier, gained 2.6 percent to 1,879 yen. The trading house bought an 18 percent stake in Anglo American Plc’s Peruvian copper unit, building on their mining partnership, Mitsubishi said today in a statement.

Trend Micro Inc. (4704 JT), a security software developer, tumbled 8.8 percent to 2,278 yen, the biggest drop on the Nikkei 225, after projecting a 32 percent drop in net income this quarter on a 6.2 percent fall in sales. Nomura Holdings Inc. cut its target price on the stock to 2,400 yen from 2,550 yen.

Uny Co. (8270 JT) soared 6.6 percent to 747 yen to lead the Nikkei 225’s advance after the department-store operator said it will offer 1,780 per share to buy out Circle K Sunkus Co. (3337 JT). The convenience-store chain surged by its daily limit of 300 yen, or 23 percent, to 1,630 yen.

-- With assistance from Yoshiaki Nohara and Andy Sharp in Tokyo. Editor: Jim Powell.

To contact the reporter 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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