Bloomberg News

Japanese Stocks Advance as Germany Weighs Growth Options

May 22, 2012

Japanese stocks rose, sending the Nikkei 225 Stock Average to its biggest gain in five weeks, as Germany said it will consider all ideas to boost euro-area growth and China pledged to bolster its economy.

Nikon Corp. (7731), a camera maker that gets more than a fifth of its revenue from Europe, climbed 2 percent. Fanuc (6954) Corp. a producer of robotics for Chinese factories, jumped 3.7 percent. Inpex Corp. (1605), Japan’s largest oil explorer by market value, gained 2.7 percent after crude prices advanced yesterday for the first time in seven days.

“Investors are getting less pessimistic,” said Koichi Kurose, chief economist at Resona Bank Ltd., Japan’s fifth- largest lender by market value. “Shares declined sharply on concern the Chinese economy is slowing down and Greece may exit the euro, but there’s pressure from the markets to keep the situation from worsening.”

The Nikkei 225 Stock Average (NKY) rose 1.1 percent to 8,729.29 at the 3 p.m. close in Tokyo, the steepest increase since April 18. Volume on the gauge was 13 percent less than the 30-day average. The broader Topix (TPX) Index gained 1.1 percent to 733.33, with more than twice as many shares advancing as falling.

The Topix has plunged 16 percent from this year’s high on March 27 as China’s economic growth slowed and on renewed concern about Europe’s debt crisis. The political gridlock in Greece after an inconclusive election this month reignited concern the nation will renege on austerity pledges required for 240 billion euros ($307 billion) in aid and exit the euro.

Futures on the Standard & Poor’s 500 Index (SPXL1) added 0.1 percent today. The gauge gained 1.6 percent in New York yesterday, the biggest rally since March 13, after Chinese Premier Wen Jiabao pledged to focus more on bolstering growth.

China Indicators

A leading index for China released today rose in April at the same pace as the prior month, offering investors some comfort that the world’s second-biggest economy may avoid a deeper slowdown.

Fanuc jumped 3.7 percent to 13,530 yen. Hitachi Construction Machinery Co., an excavator maker that gets almost a fifth of its sales from China, climbed 2.6 percent to 1,540 yen.

“Stimulus measures by China, a country with the world’s No. 2 gross domestic product, is positive for the world economy,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “China may stimulate the economy or markets as the nation’s exports are getting sluggish due to the European economic slowdown.”

Germany Eyes Growth

Shares also climbed after German Finance Minister Wolfgang Schaeuble put renewed emphasis on growth in the euro zone as the region’s governments grapple with Greek support for parties opposed to austerity measures and bailouts. Schauble said Germany and France agreed to do “everything necessary” to ensure Greece remains in Europe’s single currency.

Nikon rose 2 percent to 2,201 yen. Shimano Inc., a maker of bicycle parts that gets almost 40 percent of its sales in Europe, added 1.5 percent to 4,625 yen.

The yen remained weaker as the Bank of Japan opened a two- day meeting today amid speculation the central bank will boost stimulus measures to support growth. The bank expanded its asset-purchase program in February and April.

The yen depreciated to as low as 79.49 against the dollar today, compared with 79.26 at the close of stock trading yesterday. Against the euro, Japan’s currency weakened to 101.77 from 101.34. A weaker yen boosts the value of overseas income at Japanese companies when repatriated.

Inpex Rallies

Energy stocks climbed, with Inpex rallying 2.7 percent to 465,500 yen. Japan Petroleum Exploration Co., the nation’s second-largest oil explorer by market value, rose 1.8 percent to 3,030 yen.

Crude oil for June delivery gained for the first time in seven days in New York yesterday, rising 1.2 percent to settle at $92.57 a barrel, its biggest advance since May 1.

Among companies that declined, Terumo Corp. lost 2.7 percent to 2,958 yen, the most in the Nikkei 225. The medical tool maker’s shares fell after the Mainichi newspaper reported Olympus Corp. is unlikely to seek a capital alliance for the time being. Terumo was among companies that made an offer, the report said, citing an unidentified executive.

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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