Bloomberg News

Japanese Stocks Rise on U.S. Industrial Output, Earnings

October 17, 2012

Japanese shares gained, with the Nikkei 225 (NKY) Stock Average rising to its highest in nearly two weeks, after U.S. industrial production and corporate earnings beat expectations.

Uniden Corp. (6815), an electronic-equipment maker that counts North America as its biggest market, rose 2.9 percent. Sony Corp. (6758), a consumer electronics company that gets a fifth of its sales in Europe, gained 2 percent after German officials eased rhetoric over aid to nations in the monetary union. Misumi Group Inc. (9962) jumped 3.7 percent after the distributor of precision machine parts said it will acquire Dayton Progress Corp. of the U.S. and the components division of Canada’s Anchor Danly Co.

The Nikkei 225 rose 1.2 percent to 8,806.55 at the 3 p.m. close in Tokyo, its highest since Oct. 5. Volume was more than 10 percent above the 30-day average. The broader Topix (TPX) Index climbed 1 percent to 739.79, with more than four times as many shares rising as falling. All but one of the gauge’s 33 industry groups gained.

“The U.S. economy is improving at present,” said Yoshihisa Okamoto, who helps oversee about $34 billion at Mizuho Asset Management Co. “People in the markets are pleased and have started pouring money into shares. Investors are gradually moving into risk as they see more figures confirming that the U.S. economy and corporate earnings aren’t as bad as thought.”

The Topix has risen 2.9 percent from Sept. 6, when the European Central Bank initiated a global wave of stimulus to boost growth, with the U.S. Federal Reserve and the Bank of Japan following suit. Shares on the stock gauge traded at 0.89 times book value, compared with 2.25 for the Standard & Poor’s 500 Index and 1.53 for the Europe Stoxx 600 Index.

U.S. Data

Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. The gauge surged 1 percent yesterday after a report showed industrial production rose 0.4 percent last month after a 1.4 percent drop in August. Johnson & Johnson and Mattel Inc. led stocks higher after reporting earnings that topped estimates.

Uniden, which gets more than half of its sales from North America, gained 2.9 percent to 175 yen. Hamamatsu Photonics K.K., an electron-tube maker that counts on the U.S. for more than 25 percent of its sales, climbed 2.6 percent to 2,724 yen.

Japan stocks linked to Europe gained after two senior German lawmakers said the nation is open to Spain seeking a precautionary credit line from the monetary union’s rescue fund. Chancellor Angela Merkel yesterday said Greece’s economic overhaul is taking hold and Germans should restrain finger- pointing at euro countries struggling with debt.

Sony rose 2 percent to 956 yen. Ricoh Co., an office- equipment manufacturer that obtains more than a fifth of its revenue in Europe, gained 2 percent to 727 yen.

Euro Climbs

The euro climbed as high as 103.52 against the yen today in Tokyo, compared with 102.32 at the close of stock trading yesterday. A weaker yen boosts the value of income at Japanese companies when repatriated.

Misumi advanced 3.7 percent to 1,948 yen after saying it will spend about $200 million to acquire Dayton Progress and the components division of Anchor Danly from Connell Ltd. Partnership of Boston.

Companies that supply Intel Corp. (INTC:US) declined after the industry bellwether forecast fourth-quarter profit margins that missed estimates amid a slump in demand for personal computers.

Advantest Corp., the world’s biggest maker of memory-chip testers, lost 2.2 percent to 918 yen, the biggest drag on the Nikkei 225. Shinko Electric Industries Co., a manufacturer of semiconductor packages that gets 45 percent of its revenue from Intel, declined 2.2 percent to 495 yen.

The Nikkei Stock Average Volatility Index (VNKY) rose 0.9 percent to 17.82, indicating that traders expect a swing of 5.1 percent on the equity benchmark in the next 30 days.

-- With assistance from Toshiro Hasegawa in Tokyo. Editors: Jim Powell, Nick Gentle

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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