Bloomberg News

Japanese Stock Futures Advance on U.S. Manufacturing

May 02, 2012

Japanese stocks rose, snapping a two- day drop, after a gauge of China factory activity climbed in a sign growth may rebound and a report that U.S. manufacturing unexpectedly expanded in April.

Fanuc Corp. (6954), a producer of robotics for mainland factories, climbed 2.4 percent. Nissan Motor Co. (7201), a carmaker that gets a third of its revenue in North America, rose 0.8 percent. Japan Tobacco Inc. (2914) gained 2.4 percent on reports the cigarette maker will raise its dividend and plans to raise prices to meet its earnings target.

“There’s no doubt that boosting production globally is positive for the Japanese economy,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co. which oversees about $70 billion. “Not only the U.S. but also China, Europe and others cannot manufacture products without importing key parts and machinery from Japan.”

The Topix (TPX) Index gained 0.4 percent to 792.87 at the 3 p.m. close in Tokyo, with more than twice as many shares advancing as declining. The benchmark Nikkei 225 Stock Average (NKY) climbed 0.3 percent to 9,380.25, with volume almost 30 percent less than the 30-day average before market holidays tomorrow and the day after.

The Topix has advanced 8.8 percent this year, rebounding from last year’s 19 percent drop, amid signs of strength in the U.S. recovery and optimism the Chinese economy will avoid a hard landing.

Exporters to China gained after a mainland manufacturing index from HSBC Holdings Plc and Markit Economics rose to 49.3 in April from 48.3 the month before. A Purchasing Manager’s Index from China’s statistics bureau yesterday showed the fastest growth in a year.

Fanuc climbed 2.4 percent to 13,870 yen. Komatsu Ltd., a construction machinery maker that counts China as its biggest market, rose 1.4 percent to 2,256 yen.

U.S. Manufacturing

Futures on the Standard & Poor’s 500 Index (SPX) added 0.2 percent today. The gauge advanced 0.6 percent in New York yesterday after the Institute for Supply Management’s factory index unexpectedly rose in April. Economists surveyed by Bloomberg News had been expecting a drop.

Nissan rose 0.8 percent to 808 yen. Sony Corp. (6758), a consumer electronics exporter that earns a fifth of its revenue in the U.S., added 0.4 percent to 1,270 yen.

The dollar appreciated to as high as 80.42 yen in Tokyo, compared with 79.76 yen at the close of stock trading yesterday. The euro also strengthened to 106.34 yen today from 105.69 yen, boosting the value of some overseas income at Japanese companies when repatriated.

Japan Tobacco

Japan Tobacco, Asia’s largest cigarette maker by market value, gained 2.4 percent to 446,500 yen after the Nikkei newspaper reported that incoming President Mitsuomi Koizumi plans to raise prices in Japan, where sales volume has declined. The company also said it will raise its dividend payout ratio to 50 percent by March 2017 at the latest.

Power providers were among the biggest decliners in the Topix’s 33 industry groups. Kansai Electric Co. (9503) fell 1.2 percent to 1,129 yen after the Sankei newspaper reported the government may not restart the utility’s nuclear reactors in Ohi this summer unless it gets approval from the residents. Tokyo Electric Power Co. lost 2.6 percent to 191 yen.

Shares on the Topix trade for an average of one times book value, compared with 2.2 times for the S&P 500. A number less than one means that companies can be bought for less than value of their assets.

-- With assistance from Toshiro Hasegawa in Tokyo. Editor: Jim Powell

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net

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


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