Japan’s Nikkei 255 Stock Average (NKY), the best performing developed-market benchmark gauge this year, advanced after the lower house endorsed Prime Minister Shinzo Abe’s nominees for the Bank of Japan (8301)’s leadership.
Mitsubishi Estate Co. led developers higher on bets Haruhiko Kuroda, who today moved one step closer to becoming the next BOJ governor, will add to monetary stimulus. Kubota Corp. (6326), the farm-tractor maker seeking an overseas purchase of as much as $2 billion, gained 2.7 percent after saying sales will increase to a record next fiscal year. Nikon Corp. (7731) rose 4.2 percent as Ji-Asia Research Ltd. advised buying shares in the world’s No. 2 camera maker.
The Nikkei 225 rose 1.2 percent to close at 12,381.19 in Tokyo, the highest since Sept. 9, 2008, extending this year’s gain to 19 percent. The broader Topix Index (TPX) climbed 0.7 percent to 1,038.17, with about two stocks rose for each that fell.
“Investors are holding onto hopes that once Kuroda takes office next week, he may start bold monetary easing even before the next policy meeting in April,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, which oversees about 15 trillion yen ($156 billion). “Stocks sensitive to the bank’s policy are going strong, especially real estate shares.”
The lower house of parliament, which is dominated by the ruling coalition, today approved Kuroda for governor and Kikuo Iwata and Hiroshi Nakaso for deputy governor posts. The nominees face a vote tomorrow in the upper house, where Abe’s Liberal Democratic Party lacks a majority.
Foreign investors bought a net 1.02 trillion yen worth of Japanese shares in the week ended March 8, according to the Tokyo Stock Exchange. That’s the most since the bourse started gathering data in 1982. Overseas money managers bought more than $40 billion during the rally’s first 16 weeks.
The Topix has rallied 44 percent from Nov. 14, when a general election was announced, fueling optimism a new government will do more to beat deflation. The Topix is trading at 1.2 times book value, compared with 2.3 for the Standard & Poor’s 500 Index and 1.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Real estate shares advanced the most among the Topix’s 33 industry groups. Mitsubishi Estate, Japan’s biggest developer, gained 5 percent and Mitsui Fudosan Co., the second largest, climbed 5.3 percent to 2,773 yen.
Kubota added 2.7 percent to 1,258 yen, the highest close since Feb. 26, 2007, after President Yasuo Masumoto said a weaker yen will push sales to a record 1.4 trillion yen next fiscal year, 13 percent more than the mean of analyst estimates compiled by Bloomberg.
Nikon rose 4.2 percent to 2,206 yen as its rating was raised to buy at Ji-Asia Research Ltd. The shares plunged 20 percent through yesterday from Feb. 6, when the camera maker said price declines will probably continue this quarter amid slower demand in Europe and China.
Futures on the S&P 500 (SPXL1) were little changed today. The index rose 0.1 percent in New York yesterday, when Commerce Department figures showed a 1.1 percent advance in retail sales in February, more than forecast.
Nomura Holdings Inc. (8604) rose 1.4 percent to 586 yen. Japan’s biggest brokerage by market value is cutting staff at a business that allows foreigners to invest in Saudi Arabia’s equities market, a person familiar with the matter said.
Among stocks that fell, Japan Tobacco Inc. slid 2.3 percent to 3,130 yen, retreating from a five-year high. The cigarette maker yesterday rose the most in two years after its weighting was raised in MSCI indexes following a stake sale by the government, Societe Generale analysts led by John Carson wrote in a report.
Seiko Epson Corp. sank 4.2 percent to 952 yen in Tokyo after the printer maker cut its year-end dividend forecast.
The Nikkei Stock Average Volatility Index fell 3.4 percent to 23.85 today, indicating traders expect a swing of about 6.8 percent on the benchmark gauge over the next 30 days. Trading volume on the Nikkei 225 was 36 percent above the 30-day average.
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