Japan’s Topix Index (TPX) jumped the most in eight weeks as the yen slumped after the Bank of Japan (8301) doubled monthly bond purchases in its first policy decision since Haruhiko Kuroda took over as governor.
The Topix climbed 2.7 percent to close at 1,037.76 in Tokyo, the biggest gain since Feb. 6. The gauge reversed a 2 percent loss after the decision, with more than seven stocks rising for each that fell. The Nikkei 225 Stock Average (NKY) added 2.2 percent to 12,634.54. Volume was 42 percent above the 30-day average. The yield on the country’s 10-year government bonds slumped 12.5 basis points to a record low of 0.425 percent.
“We’re getting a sea change in monetary policy and it’s happening fast, said Kazuyuki Terao, Tokyo-based chief investment officer at Allianz Global Investors Japan Co. ‘‘That was what markets had expected, but it’s still positive.”
Sumitomo Realty & Development Co. surged 10 percent to pace gains among property companies, which rose the most among the 33 Topix industry groups. Honda Motor Co. (7267), a carmaker that gets 81 percent of its revenue outside Japan, climbed 3.4 percent, bouncing back from a 3 percent decline. Fujifilm Holdings Corp., which has a bird flu treatment under regulatory review, rose 5.7 percent after the disease took a third life in China.
The Topix has rallied 44 percent since mid-November amid optimism Prime Minister Shinzo Abe’s new government and the Bank of Japan would take more steps to beat deflation. The gauge traded at 15.6 times estimated earnings on average, compared with 14 for the Standard & Poor’s 500 Index and 12.6 for the Stoxx Europe 600 Index.
BOJ Governor Kuroda began his campaign to end 15 years of deflation with a strengthened stimulus program that will see the central bank buy 7 trillion yen ($74 billion) of bonds a month. Kuroda is scheduled to speak at a press conference today after the close of markets.
The central bank today streamlined its asset purchases by unifying separate programs, temporarily suspending a self- imposed cap on some bond holdings and pledging to buy longer- term debt.
Real estate and banking shares led gains on the Topix as investors bought companies expected to benefit from asset appreciation. Sumitomo Realty & Development, the nation’s third largest property company by market value, jumped 10 percent to 4,165 yen. Mitsubishi Estate Co., the biggest by market value, added 7.2 percent to 2,846 yen. Mitsui Fudosan Co. (8801) gained 7.8 percent to 2,930 yen.
Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender, advanced 5.5 percent to 578 yen. Sumitomo Mitsui Financial Group Inc. (8316) climbed 6.6 percent to 3,960 yen, while Mizuho Financial Group Inc. (8411) rose 5.1 percent to 206 yen.
Exporters climbed as the yen slumped against all 16 major counterparts, dropping as much as 2.6 percent to 95.56 per dollar. Honda, Japan’s second largest carmaker by market value, rose 3.4 percent to 3,645 yen. Fanuc Corp. (6954), a maker of factory robots that generates 76 percent of its revenue abroad, advanced 2.1 percent to 14,580 yen.
Futures on the S&P 500 Index (SPX) rose 0.3 percent. The measure fell the most in five weeks yesterday, when ADP Research Institute data showed U.S. companies boosted employment by 158,000 workers in March, less than a median economist forecast of a 200,000 gain. The data came before the Labor Department’s monthly payrolls report due April 5.
The Institute for Supply Management’s index of U.S. non- manufacturing businesses fell to 54.4 in March from 56 in February, the Tempe, Arizona-based group said yesterday. The median forecast was 55.5. Readings above 50 signal expansion.
Fujifilm gained 5.7 percent to 1,879 yen. The company has a drug under review by Japanese regulators that was found to be more effective in combating bird flu virus than Tamiflu. A third person was killed by a new strain of the virus, which has infected at least nine people in eastern China since last month, according to the Xinhua News Agency.
Astellas Pharma Inc., Japan’s second largest drug maker by market value, gained 5.8 percent to 5,220 yen. Chugai Pharmaceutical Co. advanced 9.5 percent to 2,325 yen, while Taiko Pharmaceutical Co. surged 17 percent to 1,038 yen.
The Nikkei Stock Average Volatility Index (VNKY) slid 3.6 percent to 26.14 today, indicating traders expect a swing of about 7.5 percent on the benchmark gauge over the next 30 days.
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