Bloomberg News

Nikkei 225 Caps Biggest Weekly Advance This Year on Yen

October 19, 2012

Japanese shares rose, with the Nikkei 225 Stock Average (NKY) recording its biggest weekly gain this year, as machinery makers advanced after manufacturing in the Philadelphia region expanded the first time in six months and the yen weakened against the dollar.

Fanuc Corp. (6954), the world’s biggest maker of factory robotics, gained 3.9 percent. Honda Motor Co., a carmaker that gets almost 45 percent of its sales in North America, rose 1.1 percent. NEC Corp. (6701) rose the most in nearly four years as the electronics maker’s earnings beat its forecast. Japan Tobacco Inc. (2914), which leads Russia’s cigarette market, slid 1.6 percent on a report the nation’s government is cracking down on smoking.

The Nikkei 225 Stock Average added 0.2 percent to 9,002.68 at the 3 p.m. close in Tokyo after falling as much as 0.5 percent. The gauge gained 5.5 percent this week, its biggest such rise since December. Volume was 7.2 percent above the 30- day average today. The broader Topix Index rose 0.3 percent to 754.39.

“The yen’s decline is fueling confidence in the Japanese market,” said Naoki Fujiwara, a chief fund manager at Shinkin Asset Management Co., which oversees about $6.6 billion. “The U.S. economy is recovering, encouraging investors to buy dollars instead of the yen. There are catalysts but many investors don’t want to buy shares in earnest until they see earnings coming out next week.”

The Topix has gained 4.9 percent from Sept. 6, when the European Central Bank initiated a global wave of stimulus, with the U.S. Federal Reserve and the Bank of Japan following suit. Shares on the equity gauge trade at 0.90 times book value, compared with 2.24 for the Standard & Poor’s 500 Index and 1.54 for the Stoxx Europe 600 Index.

U.S. Manufacturing

Futures on the S&P 500 were little changed today. The gauge fell 0.2 percent yesterday as Google Inc. pulled down technology shares after its third-quarter profit and sales missed estimates. The earnings were filed inadvertently before the close. Manufacturing in the Philadelphia region rose more than expected, a sign the recovery is stabilizing.

Fanuc jumped 3.9 percent to 13,290 yen. Komatsu Ltd., a construction-machinery maker that gets almost 25 percent of its sales in the Americas, gained 2.8 percent to 1,752 yen.

NEC gained the most on the Nikkei 225, rising 10 percent to 137 yen after its preliminary earnings report showed that operating profit in the six months ended Sept. 30 jumped to 47 billion yen ($592 million) from 6.8 billion yen a year earlier, beating its 1 billion yen projection.

Japan Tobacco slipped 1.6 percent to 2,315 yen after Russian Deputy Prime Minister Olga Golodets said an anti-tobacco law approved by the government will be submitted to lawmakers within the “next few days.”

The Nikkei Stock Average Volatility Index (VNKY) slumped 4.4 percent to 17.99, indicating that traders expect a swing of 5.2 percent on the equity benchmark in the next 30 days.

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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