Japanese Stocks Rise on U.S. Retail Sales Growth

Japanese stocks rose, boosting the Nikkei by the most in more than a month, after a U.S. trade group said retail sales in the world’s biggest economy grew at the fastest pace in four years.

Sony Corp., which gets more than a fifth of its sales from the U.S., increased 4.4 percent. Canon Inc., which receives almost 80 percent of its sales outside Japan, advanced 3.3 percent. Toyota Motor Corp., the world’s No. 1 carmaker, gained 2.6 percent. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, rose 3.4 percent amid speculation that stress tests of Europe’s lenders will be less severe than forecast. Chipmakers jumped on the outlook for growing demand.

“The markets had been falling for a long time, so people who had been short on stocks now have a reason to buy,” said Koichi Kurose, chief strategist in Tokyo at Resona Bank Ltd., which manages about $54 billion. “Positive data surprises show the global economy is on track to recovery.”

The Nikkei 225 Stock Average increased 2.8 percent to 9,535.74 as of the close of trading in Tokyo, the most since June 3. The broader Topix index rose 2.3 percent to 861.02, with about 10 stocks advancing for each that fell.

The Nikkei 225 has tumbled 9.6 percent this year as Europe’s deficit and China’s measures to curb economic growth fueled concerns about the strength of the global economy. Companies in the gauge trade at 17.7 times estimated earnings, compared with 12.9 times for the S&P in the U.S. and 11.4 times for the Stoxx Europe 600 Index.

Sony, Canon

Futures on the Standard & Poor’s 500 Index slipped 0.2 percent. Yesterday, the gauge rallied 3.1 percent in New York, after the International Council of Shopping Centers trade group said U.S. retailers’ sales are growing at the fastest pace in four years. Banks advanced as second-quarter operating profit of State Street Corp., the third-largest U.S. custody bank, beat estimates.

A gauge for electrical appliance companies, which includes Sony and Canon, climbed 3.5 percent, the fourth-biggest increase among the Topix’s 33 industry groups. All the groups rose today.

Sony, the maker of Bravia televisions, gained 4.4 percent to 2,423 yen. Canon increased 3.3 percent to 3,445 yen. Toyota, which derives 28 percent of its sales from North America, advanced 2.6 percent to 3,130 yen. It was the biggest contributor to the Topix’s gain.

The yen depreciated to as low as 88.46 against the dollar today, compared with 87.49 at the close of stock trading in Tokyo yesterday. Against the euro, it fell to as much as 112.01 from 110.09 yesterday. A weaker yen boosts overseas income at Japanese companies when converted into their home currency.

U.S. Retail Sales

U.S. retail sales probably expanded at an average monthly rate of 4 percent in the first five months of the retail fiscal year that began Jan. 31, the biggest gain since 2006, the International Council of Shopping Centers trade group said.

“The general consensus was that the U.S. economy was going to deteriorate, and the good retail sales put a brake on that view,” said Mitsushige Akino, who oversees $450 million at Tokyo-based Ichiyoshi Investment Management Co.

Stocks also rose after European banking regulators told lenders that their planned stress tests may assume a loss of about 17 percent on Greek government debt, according to two people briefed on the talks who declined to be identified. The percentage was half the worst-case scenario estimated by JPMorgan Chase & Co.

Japanese Banks

A gauge of bank stocks was the third-biggest contributor to gains by the Topix.

Mitsubishi UFJ rose 3.4 percent to 428 yen. Sumitomo Mitsui Financial Group Inc., Japan’s second-largest bank by market value, advanced 3 percent to 2,679 yen. Resona Holdings Inc., No. 4, rose 2.8 percent to 1,091 yen.

In the U.S., State Street reported second-quarter earnings per share of 93 cents, above the mean estimate of 72 cents by analysts in a Bloomberg survey.

“We will likely see good numbers come out in the upcoming earnings season,” said Kurose. “The question is whether they can continue.”

Chipmakers advanced after a report that Tokyo Electron Ltd., the world’s biggest manufacturer of chip-production equipment, will spend 1 billion yen ($11 million) to increase output in Iwate, northern Japan, by 20 percent, the Iwate Nippo newspaper said, without citing anyone.

Tokyo Electron

Tokyo Electron jumped 5.2 percent to 4,900 yen, its highest close since May 13. Advantest Corp., the world’s largest maker of memory-chip testers, increased 6 percent to 1,881 yen, for the third-biggest gain in the Nikkei 225. Sumco Corp., which makes silicon wafers for the semiconductor industry, rose 5.2 percent to 1,586 yen.

The Nikkei newspaper also reported that global semiconductor sales will maintain growth as increasing demand in Asia overcomes concerns European demand will wane.

JX Holdings Inc., Japan’s biggest refiner and No.1 copper producer, jumped 6.3 percent to 489 yen, as prices of oil and copper climbed. It had the biggest gain on the Nikkei 225, extending yesterday’s 3.4 percent advance after the Yomiuri newspaper reported the company is in talks with China Petroleum and Chemical Corp. to build a lubricant plant in China.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

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