By Akiko Ikeda and Toshiro Hasegawa - Aug 18, 2010 2:58 PM GMT+0800
Japanese stocks rose for the first time in three days after industrial production in the U.S. jumped twice as much as forecast and as commodity prices climbed.
Honda Motor Co. and Canon Inc., which get about 80 percent of their sales abroad, rallied at least 1 percent. Mitsubishi Corp., Japan’s largest commodities trader, jumped 2.5 percent as crude oil and metal prices gained yesterday. Nidec Corp., the world’s biggest maker of motors for disk drives, leapt 3.4 percent after announcing an acquisition. Nikon Corp. climbed 1.6 percent after Deutsche Bank AG boosted its investment rating.
The Nikkei 225 Stock Average rose 0.9 percent to 9,240.54 at the 3 p.m. close in Tokyo. The broader Topix index climbed 1 percent to 835.23, with more than twice as many stocks rising as falling. Both gauges had dropped in six of the past seven days. All but one of the 33 industry groups in the Topix increased.
“Market sentiment had worsened excessively, so now it’s coming back,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees $104 billion.
The Topix has declined 8 percent in 2010, cutting the average price of stocks in the gauge to 15.5 times estimated earnings, near the lowest level since November 2008.
Honda, Japan’s second-biggest automaker, advanced 2.4 percent to 2,827 yen and was the main contributor to the Nikkei’s gain. Canon, the world’s largest camera maker, climbed 1 percent to 3,580 yen. Daikin Industries Ltd., the world’s second-biggest maker of air conditioners, rose 2.7 percent.
U.S. Economy
The Standard & Poor’s 500 Index climbed 1.2 percent in New York yesterday following higher-than-estimated earnings and BHP Billiton’s $39 billion bid for Potash Corp. of Saskatchewan Inc. A report from the Federal Reserve showed industrial production rose 1 percent in July, double the median forecast of economists surveyed by Bloomberg.
“Investors are swinging from sorrow to joy with every tiny piece of economic data,” said Mitsushige Akino, chief fund manager overseeing $450 million in assets at Tokyo-based Ichiyoshi Investment Management Co. “Investors have been extremely sensitive.”
Mitsubishi rose 2.5 percent to 1,885 yen. Mitsui & Co., Japan’s No. 2 trading company by market value, climbed 2 percent to 1,188 yen. Inpex Corp., the country’s largest oil-exploration company, gained 4.6 percent to 396,000 yen and JX Holdings Inc., Japan’s largest oil refiner and copper producer, leapt 4 percent to 470 yen.
Oil, Metals Gain
Crude oil for September delivery increased yesterday for the first time in six days in New York, gaining 0.7 percent to $75.77 a barrel. The London Metal Exchange Index of six metals including copper and zinc climbed 1.7 percent yesterday.
Nidec leapt 3.4 percent to 7,390 yen, after the company said it plans to buy Emerson Electric Co.’s motors & controls business.
Nikon, a camera maker, advanced 1.6 percent to 1,511 yen. Deutsche Bank increased its investment recommendation to “buy” from “hold,” saying profit will likely remain solid next year, helped by new products.
Fuji Heavy Industries Ltd. rose 2.6 percent to 483 yen. The maker of Subaru cars was raised to “buy” from “hold” at BNP Paribas SA.
MSCI Inclusion
“While Fuji Heavy’s earnings will take a hit from the yen, we expect the company to cover it with greater-than-expected volume and mix gains,” Andrew Phillips, an analyst at BNP Paribas in Tokyo, said in a report dated today.
Hamamatsu Photonics K.K. soared 6.4 percent to 2,606 yen. MSCI Inc. said it will include the maker of electron tubes and semiconductors in the MSCI World Index.
The Nikkei has fallen 12 percent this year, the most among benchmark indexes in the world’s five-largest developed countries, as the strengthening yen, Europe’s debt crisis and concern about slowing economic growth in China and the U.S. dented confidence in a global recovery.
The Nikkei 225 fell as much as 0.1 percent this morning as the yen advanced against the dollar and euro, cutting the value of overseas income at Japanese companies when repatriated
The yen reached a 15-year high against the dollar last week and is on course for its highest average annual level since currencies became freely tradable in 1971, according to data compiled by Bloomberg.
Japan’s Cabinet Office said on Aug. 16 that the economy grew to $1.288 trillion last quarter, falling one level to third place worldwide behind the U.S. and China. The data reinforce International Monetary Fund predictions that China will be the No. 2 economy by the end of 2010.
“We’ll stay in a wait-and-see position, cautious in case of a market drop,” said Hiroshi Morikawa, a strategist in Tokyo at MU Investments, which manages about $14 billion. “There’s still concern about the U.S. economic recovery.”
To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.
From Bloomberg, published on Aug 18, 2010 2:58 PM GMT+0800