Bloomberg News

Japanese Stocks Advance on U.S. Jobs Data, European Bailout Fund Optimism

March 02, 2012

Japanese shares advanced, with the Nikkei 225 (NKY) Stock Average rising to a seven-month high, after U.S. jobless claims fell to a four-year low and on signs European leaders will speed the establishment of a permanent bailout fund to help contain the debt crisis.

Mizuho Financial Group Inc. (8411), Japan’s third-largest bank by market value, gained 1.5 percent. Mitsui Fudosan Co., the country’s top property developer by revenue, climbed 1.9 percent after Deutsche Bank AG said the sector may continue to rise. Kawasaki Kisen Kaisha Ltd., Japan’s No. 3 shipping line by sales, soared 7.6 percent as container rates jumped.

The Nikkei 225 rose 0.7 percent to 9,777.03 at the 3 p.m. close in Tokyo, its highest level since Aug. 2 and a 1.3 percent gain on the week. The broader Topix Index added 0.8 percent to 837.82, with volume 27 percent higher than the 100-day average.

“The U.S. economy overall is headed for a mild recovery, and that’s supporting stocks,” Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co., which oversees about $84 billion. “The Greek debt crisis isn’t fully resolved yet, but it has calmed down for now.”

U.S. Jobs Data

Futures on the Standard & Poor’s 500 Index (SPXL1) fell 0.1 percent today. The gauge rose 0.6 percent to its highest level since June 2008 in New York yesterday after a U.S. government report showed the number of initial claims for jobless benefits fell to a level matching a four-year low, adding to evidence the labor market is recovering.

“U.S. jobs are markedly improving,” said Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities Co. in Tokyo. “The European situation is calm, which is good for stock markets.”

Financial stocks gained on speculation European governments today will agree to contribute the first installments into a 500 billion-euro ($666 billion) rescue fund this year and complete the capitalization in 2015, a year ahead of schedule.

Mizuho, climbed 1.5 percent to 136 yen. Bank of Yokohama Ltd., Japan’s largest regional bank by revenue, gained 1.3 percent to 396 yen.

Developers Jump

Property developers gained the most among the 33 Topix industry groups after Deutsche Bank said the recent advance in the real estate sector “has just started and substantial upside remains.”

Mitsui Fudosan (8801) rose 1.9 percent to 1,530 yen. Mitsubishi Estate Co., Japan’s second-largest developer by revenue, increased 2.4 percent to 1,469 yen.

Energy companies and trading houses advanced after crude yesterday climbed above $110 a barrel for the first time since May after a pipeline explosion was reported in Saudi Arabia.

Japan Petroleum Exploration Co. (1662), the nation’s No. 2 oil explorer by market value, advanced 1.7 percent to 3,930 yen. Mitsui & Co., a trading house that counts commodities as its biggest source of profit, added 1 percent to 1,402 yen.

Shipping companies also advanced after container freight rates between Asia and Europe jumped 114 percent this week, according to estimates by Drewry Shipping Consultants Ltd.

Shippers Advance

Kawasaki Kisen Kaisha Ltd. (9107), Japan’s third-largest shipping line by sales, soared 7.6 percent to 184 yen, leading the sector higher. Nippon Yusen K.K. climbed 2.9 percent to 246 yen, while Mitsui O.S.K. Lines Ltd. added 0.8 percent to 369 yen.

Tokyo Electric Power Co., which plans to raise electricity rates this year, jumped 4.9 percent to 238 yen after the Yomiuri newspaper reported the utility will maintain the new rates for three years.

Japan’s consumer prices fell for a fourth month, indicating the Bank of Japan may need to do more to counter deflation after expanding monetary easing. The government also reported that the unemployment rate rose 0.1 percent to 4.6 percent in January.

The Topix has risen 7.2 percent since Feb. 14, when the Bank of Japan increased its bond purchases, weakening the yen. The value of stocks listed on the index has risen to 1.03 times book value, up from 0.88 in December, according to data compiled by Bloomberg. A number below 1 means companies can be bought for less than value of their assets.

-- With assistance from Toshiro Hasegawa 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: Nick Gentle at ngentle2@bloomberg.net


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