Bloomberg News

Topix Caps Longest Weekly Winning Streak Since ’86 on Yen

January 18, 2013

Jan. 18 (Bloomberg) -- Japan stocks rose, with the Topix (TPX) Index capping its longest weekly winning streak since 1986, after the yen fell below 90 to the dollar for the first time in 2 1/2 years, and U.S. housing and jobs data beat estimates.

Toyota Motor Corp. (7203), Asia’s biggest carmaker by market value, rose 2.1 percent to its highest since 2008. Sony Corp. (6758) surged 12 percent to lead exporters higher on a weaker yen and after announcing the sale of its New York headquarters for $1.1 billion. Advantest Corp. (6857) paced gains among makers of semiconductor equipment after bellwether Intel Corp. said it was raising capital spending. GS Yuasa Corp., a battery supplier to Boeing Co., rebounded 3.3 percent on speculation defective batteries linked to the grounding of 787s may be confined to a small number of planes.

The Topix rose 2.4 percent to close at 911.44 in Tokyo, gaining 1.4 percent for the week. The equity gauge rose for a 10th week, the longest such streak since July 1986. The Nikkei 225 Stock Average (NKY) gained 2.9 percent to 10,913.30. Shares rose after Economy Minister Akira Amari yesterday said Japan’s currency has more room to fall.

“The yen has fallen after the politician’s comments and that’s pushing up stocks,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of about 6 trillion yen ($67 billion). “In terms of overseas factors, Japanese stocks are getting support from strong U.S. economic reports and Intel earnings.”

The Topix has risen 26 percent since Nov. 14, when elections were announced, on optimism the new government will take steps to fight deflation. The Cabinet approved a 10.3 trillion yen stimulus package on Jan. 11.

The Topix is trading at 1.08 times book value, compared with 2.22 for the Standard & Poor’s 500 Index (SPXL1) and 1.60 for the Stoxx Europe 600 Index.

Yen Weakens

Exporters rose after the yen touched 90.21 per dollar, the lowest level since June 2010, while it also fell against 13 of its 16 major counterparts. Japan stocks are at their most sensitive to swings in the currency in 24 years, with the negative correlation of the Topix to the yen the greatest since 1988.

Sony jumped 12 percent to 1,149 yen, its biggest gain since 2008. Japan’s No. 1 exporter of consumer electronics said it agreed to sell its 37-story New York headquarters to investors led by the Chetrit Group for $1.1 billion.

Toyota gained 2.1 percent to 4,300 yen, the highest since October 2008. Mazda Motor Corp. (7261), an automaker that gets 28 percent of its sales in North America, jumped 12 percent to 220 yen, capping the largest gain since January 2009.

Japan’s Finance Minister Taro Aso said the government and the Bank of Japan will release a joint statement at the BOJ’s Jan. 21-22 meeting. The government has urged the central bank to double its inflation target to 2 percent.

U.S. Jobs

Futures on the Standard & Poor’s 500 Index were little changed today. The equity gauge added 0.6 percent in New York yesterday, when data showed builders broke ground on more homes than forecast in December and first-time unemployment claims fell more than forecast last week.

Stocks maintained gains after a report showed China’s economic growth accelerated for the first time in two years. Gross domestic product rose 7.9 percent in the fourth quarter from a year earlier, the National Bureau of Statistics said in Beijing today, beating estimates for a 7.8 percent gain.

Makers of semiconductor equipment advanced after Intel said it will spend around $13 billion on new plants and equipment in 2013. Taiwan Semiconductor Manufacturing Co., the world’s largest contract producer of chips, forecast sales surpassing expectations on rising demand for components used in phones and tablets.

Advantest Surges

Advantest, the world’s biggest maker of memory-chip testers, rose 8.2 percent to 1,380 yen. Tokyo Electron Ltd. (8035) gained 8.4 percent to 4,125 yen, while Dainippon Screen Manufacturing Co. advanced 4.9 percent to 472 yen.

GS Yuasa gained 3.3 percent to 315 yen after falling 9.2 percent the past two days. U.S. officials and Boeing are investigating whether defective batteries from the same batch caused failures in two 787 Dreamliners. If proved, flaws may be confined to a small number of planes. Yuasa said it may take months to complete its probe into the cause of an emergency landing of an All Nippon Airways Co. Dreamliner on Jan. 16. ANA and Japan Airlines Co. have since grounded their 787s.

The Nikkei Stock Average Volatility Index (VNKY) rose 7.1 percent to 23.90, indicating traders expect a swing of about 6.9 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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