Bloomberg News

Nikkei 225 Caps Longest Rally Since October on U.S. Data

March 07, 2013

Japanese shares rose, with the Nikkei 225 (NKY) Stock Average capping a six-day advance, after a report showed U.S. employers added more jobs than expected. Shares pared gains after the Bank of Japan (8301) held off more easing.

Mazda Motor Corp. (7261), an automaker that gets 28 percent of its sales in North America, added 4.6 percent. GS Yuasa Corp., which makes batteries for Boeing Co., surged 8.9 percent on a Reuters report that U.S. authorities may allow 787 Dreamliner flight tests with a fix for a battery problem blamed for fires on the planes. Olympus Corp. (7733) climbed 5.5 percent on a Nikkei newspaper report the optics maker plans to cut debt by 100 billion yen ($1.06 billion).

The Nikkei 225 added 0.3 percent to close at 11,968.08 in Tokyo after climbing as much as 1.2 percent. The gauge rose a sixth day, the longest such winning streak since Oct. 23. The broader Topix Index advanced 0.1 percent to 1,004.35, with 19 of 33 industry groups rising.

“The U.S. labor market is recovering steadily and gradually,” said Kenji Shiomura, a Tokyo-based senior strategist at Daiwa Securities Group Inc., Japan’s second- largest brokerage. “Expectations for further easing in Japan remain strong, keeping the yen from rising.”

The Topix surged 39 percent from Nov. 14 on optimism the new government will beat deflation, with Prime Minister Shinzo Abe nominating easing-proponent Haruhiko Kuroda to lead the central bank. The measure is trading at 1.2 times book value, compared with 2.1 for the Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index.

U.S. Jobs

Futures on the S&P 500 Index fell less than 0.1 percent today. The U.S. equity gauge gained 0.1 percent yesterday on an ADP Research Institute report that companies added 198,000 workers in February, beating the median economist estimate of 170,000. The U.S. economy expanded at a modest pace across most of the country amid rising demand for homes and autos, the Federal Reserve said in its Beige Book report.

Exporters gained after the yen fell to 94.12 against the dollar today, the weakest since Feb. 25. Mazda added 4.6 percent to 293 yen. Dainippon Sumitomo Pharma Co., a drugmaker that gets 31 percent of its sales in the U.S., advanced 1.8 percent to 1,381 yen.

Shares pared gains after the BOJ rejected a call for an immediate start to open-ended asset purchases today in Governor Masaaki Shirakawa’s final meeting before stepping down on March 19. The central bank also left its asset-purchase fund unchanged at 76 trillion yen. Kuroda on March 4 vowed to do whatever necessary to end deflation if named central bank head.

‘Expected More’

“There may have been some in the market who had expected something more from the BOJ policy decision today, but overall I think it was as expected,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd., which manages about $163 billion in assets. “The stock market and the currency market maybe got a bit too ahead of themselves in expecting more from the BOJ.”

Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender by market value, fell 1.5 percent to 527 yen, and Sumitomo Mitsui Financial Group Inc. (8316), the No. 2 bank, slid 2.5 percent to 3,755 yen.

GS Yuasa jumped 8.9 percent to 437 yen. U.S. regulators are poised to approve within days a plan to allow flight tests of the 787 Dreamliner with a fix for its batteries, Reuters reported.

Olympus gained 5.5 percent to 2,210 yen after the Nikkei reported the maker of endoscopes plans to cut interest-bearing debt by 100 billion yen in the next fiscal year, exceeding the 70 billion yen target set in June.

Sharp Drops

Sharp Corp. (6753) dropped 7.9 percent to 314 yen after yesterday soaring 14 percent yesterday on expectations Samsung Electronics Co. would invest in the display maker, with the 10.4 billion yen deal confirmed after the close. Sharp plunged today after Deutsche Bank AG said Samsung may demand priority supply with preferential prices.

The Nikkei Stock Average Volatility Index (VNKY) added 1.2 percent to 25.09, indicating traders expect a swing of about 7.2 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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