Bloomberg News

Japanese Stocks Rise From Biggest Loss Since May on Yen

January 17, 2013

Japan Stocks Head for Biggest Two-Day Loss in 14 Months on Yen

An employee works on the trading floor of the Tokyo Stock Exchange. Photographer: Kiyoshi Ota/Bloomberg

Japanese shares rose, with the Nikkei 225 Stock Average (NKY) paring the biggest loss since May yesterday, as the yen reversed gains to fall against most its major counterparts. GS Yuasa Corp. (6674) dropped on concern about its lithium-ion batteries.

Toyota Motor Corp. (7203), a carmaker that gets about 70 percent of its sales outside Japan, rose 1.3 percent. Sharp Corp. (6753) led gains on the Nikkei 225 on a report it may sell a television factory in China to Lenovo Group Ltd. GS Yuasa, a supplier of batteries to Boeing 787 planes, dropped 5 percent after U.S. regulators ordered airlines to prove the batteries are safe.

The Nikkei 225 rose 0.1 percent to close at 10,609.64 in Tokyo after falling as much as 1.6 percent and gaining as much as 0.9 percent. The gauge declined 2.6 percent yesterday, the biggest drop since May 18. The broader Topix (TPX) Index added 0.3 percent to 890.46.

“The stock market has become nervous about currency moves,” said Kenji Shiomura, a Tokyo-based senior strategist at Daiwa Securities Group Inc., Japan’s second-largest brokerage. “It’s not that we have outstanding factors to the market, but the market is becoming more volatile.”

The Topix capped the longest weekly advance since 1989 on Jan. 11 after a new government announced a 10.3 trillion yen ($117 billion) stimulus package. Japan’s broadest measure of equity performance rose 24 percent from Nov. 14, when elections were announced, through Jan. 11. The yen fell 10 percent against the dollar in the period.

Yen Declines

The Topix is trading at 1.05 times book value, compared with 2.20 for the Standard & Poor’s 500 Index (SPXL1) and 1.59 for the Stoxx Europe 600 Index.

Stocks advanced as the yen fell against 15 of its 16 major counterparts. A weaker yen boosts the value of overseas earnings at Japanese exporters. Toyota gained 1.3 percent to 4,210 yen. Fanuc Corp. (6954), a maker of factory robots that generates 76 percent of its sales outside Japan, rose 1.5 percent to 14,670 yen.

Futures on the S&P 500 Index dropped 0.2 percent today after the benchmark gauge was little changed yesterday as a reduction of the World Bank’s global growth forecasts offset a rally in Apple Inc. shares.

GS Yuasa Drops

GS Yuasa declined 5 percent to 305 yen after the U.S. Federal Aviation Administration ordered airlines to prove that lithium-ion batteries in Boeing 787 Dreamliners “are safe and in compliance.” A 787 operated by All Nippon Airways Co. yesterday made an emergency landing after pilots saw smoke in the cockpit and a Japan Airlines Co. Dreamliner had a battery fire last week. Both carriers have grounded their 787 fleets.

Sharp gained 7.3 percent to 338 yen after the Nikkei newspaper said the company may sell a TV factory to Lenovo and form a China sales venture with the PC maker.

The Nikkei Stock Average Volatility Index (VNKY) slid 0.4 percent to 22.32, indicating traders expect a swing of about 6.4 percent on the benchmark gauge over the next 30 days.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net


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