Japan Stocks Extend 6-Month High as Yen Boosts Earnings Outlook
February 23, 2012, 6:29 PM ESTBy Yoshiaki Nohara
Feb. 23 (Bloomberg) -- Japanese stocks rose for a second day, with the Nikkei 225 Stock Average extending a six-month high, as the yen’s drop to its lowest against the dollar since July boosted the earnings outlook for exporters.
Nintendo Co., the world’s top maker of game consoles, rose 4 percent. Elpida Memory Inc. jumped 13 percent after Credit Suisse Group AG and Goldman Sachs Group Inc. raised their stakes in the chipmaker. Mazda Motor Corp., which forecast its biggest annual loss in 11 years, slumped 6.8 percent after announcing plans to sell as much as 162.8 billion yen ($2 billion) in new shares.
The Nikkei 225 rose 0.4 percent to 9,595.57 at the 3 p.m. close in Tokyo after falling as much as 0.4 percent. The gauge this week has traded at the highest level since Aug. 4 after advancing 13 percent this year. The broader Topix Index added 0.5 percent to 829.35 today. Japan was the only major market to rise in Asia except for China.
“The yen continues to have a big impact on stocks,” said Kazuyuki Terao, chief investment officer of RCM Japan Co. “A weaker yen lifts sentiment, but investors remain cautious about a possible rebound.”
Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The gauge dropped 0.3 percent in New York yesterday as purchases of previously owned homes in the U.S. rose less than forecast, according to the National Association of Realtors.
Yen’s Decline
Exporters gained after the yen touched 80.40 against the dollar yesterday, the lowest level since July 11. Nintendo gained 4 percent to 12,300 yen. Canon, a camera maker that gets 80 percent of its sales abroad, rose 0.7 percent to 3,610 yen.
Elpida jumped 13 percent to 349 yen after regulatory filings showed Goldman Sachs and Credit Suisse each raised their stakes in the memory-chip maker above 5 percent. The stock has plunged 71 percent over the past 12 months amid speculation it may go bankrupt.
Stocks gained even after the 25-day Toraku index, which compares the number of advancing and declining equities on the Tokyo Stock Exchange, rose to 141 yesterday. The measure has been above the 120 threshold that some investors take as a sign shares may decline for eight days.
Mazda slumped 6.8 percent to 137 yen after saying it may sell as much as 162.8 billion yen in new shares and borrow 70 billion yen as it braces for a 100 billion yen loss. The carmaker is also at risk of a credit-rating downgrade.
Japan’s $250 billion in spending to rebuild after last year’s record earthquake is helping drive the longest streak of advances in more than 50 years for the country’s smaller stocks.
The TSE Second Section Price Index, a measure of smaller companies on the Tokyo bourse, rose today for a 28th day, its longest series of gains, according to data compiled by Bloomberg going back to 1961. The gauge added 1.4 percent to 2,361.21, bringing the value of stocks in the measure to 0.7 times book value, compared with 1.2 times for the Topix.
The Nikkei 225 Volatility Index climbed 0.7 percent to 21.36, indicating traders expect a swing of about 6.1 percent on the benchmark gauge over the next 30 days.
The following were among the most active shares in the Japanese market today. Stock symbols are in parentheses after company names.
KDDI Corp. (9433 JT) fell 2.1 percent to 507,000 yen after Nomura Holdings Inc. cut the mobile phone carrier’s rating to “neutral” from “buy. The Nikkei newspaper reported that the sector’s revenue will not meet expectations as handset sales fall.
Tobu Railway Co. (9001 JT) added 2 percent to 406 yen after boosting its full-year net-income forecast 17 percent to 14 billion yen, citing cost cuts and a reversal of deferred tax assets.
--Editors: Jim Powell, Jason Clenfield.
To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.
