Bloomberg News

Japan Stocks

March 26, 2012

The Nikkei 225 Stock Average (NKY) edged up, rebounding from its biggest drop in two months, after Bank of America Merrill Lynch said recent stock gains in Japan will last until summer.

Kyocera Corp. (6971), a Japanese electronics maker that gets almost 20 percent of its sales in Europe, rose 1.2 percent after the yen weakened against the euro. Trading house Mitsubishi Corp. gained 1.6 percent on higher commodities prices. Sumco Corp., a silicon wafer maker, jumped 3.1 percent after Goldman Sachs Group Inc. raised its estimate for dynamic random access memory prices. Mitsumi Electric Co. sank 6.6 percent after its equity rating was cut to “underweight.”

“There isn’t much news -- positive or negative -- to trade on today and investors are finding it difficult to take positions,” said Ryuta Otsuka, a strategist at Toyo Securities Co. in Tokyo. “Tomorrow is the last day to buy shares and still get dividends for the current fiscal year, and we’re seeing buying wind down.”

The Nikkei 225 edged up 0.1 percent to 10,018.24 at the 3 p.m. close in Tokyo, after falling 1.1 percent on March 23, as Merrill raised its estimate of the Topix (TPX)’s fair value to 950 from 900 to reflect a weaker yen. The Bank of Japan’s March Tankan, to be published on April 2, “will show how far the yen’s recent softening has fed into improved economic sentiment,” according to a report by Merrill.

The broader Topix Index slid 0.1 percent to 851.82 after rising as much as 0.4 percent earlier. Volume on the Topix was 27 percent lower than the 30-day average. Almost 80 percent of the 1,668 companies listed on the gauge will go ex-dividend on March 28.

Exporters gained. Kyocera climbed 1.2 percent to 7,570 yen. Nissan Motor Co., a carmaker that gets about 80 percent of its revenue from overseas, jumped 2.5 percent to 876 yen.

The yen depreciated to as low as 109.86 against the euro today in Tokyo, compared with 109.32 at the close of stock trading on March 23. Against the dollar, Japan’s currency weakened to 82.95 from 81.98 around midnight. A weaker yen boosts the value of overseas income at Japanese companies when repatriated.

“More and more investors are coming to think that the yen has completely stopped strengthening,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co. which oversees about $84 billion. “Compared with the 76 yen level against the dollar in early February, exporters’ profitability is improving for sure.

Topix Gains

The Topix (TPX) has risen more than 8 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 1.05 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.

Among stocks that gained, Sumco (3436) and other chip-related companies rose after Goldman Sachs boosted its April-June estimate for DRAM large-lot prices. The demand-supply balance on DRAMs is improving after Elpida Memory Inc. went bankrupt, Goldman said in report dated on March 23.

Sumco jumped 3.1 percent to 1,008 yen. Tokyo Electron, Japan’s biggest manufacturer of chip-making equipment, gained 1.9 percent to 4,845 yen.

Futures on the Standard & Poor’s 500 Index (SPXL1) added 0.2 percent today. Material and energy shares led the index’s 0.3 percent advance in New York on March 23, when crude oil climbed $1.52 to settle at $106.87 a barrel.

The London Metal Exchange Index of prices for six industrial commodities including copper and aluminum added 0.7 percent on March 23, its first advance since March 19.

Mitsubishi gained 1.6 percent to 1,983 yen. Mitsubishi Materials Corp., Japan’s third-largest copper producer, climbed 1.1 percent to 273 yen. Inpex Corp., the nation’s top oil explorer by market value, rose 0.9 percent to 571,000 yen.

Among companies that fell, Mitsumi Electric fell the most in the Nikkei 225 (NKY) after Morgan Stanley MUFG Securities Co. cut the investment rating on the electronic parts maker to “underweight” from “equal-weight,” citing “stiffer competition with Taiwanese firms” that makes console controllers used for games. Mitsumi fell 6.6 percent to 723 yen.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@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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