Japan's Stocks Rise as Europe Debt Concern Eases, Yen Weakens; Canon Gains
Japanese stocks rose for the first time in three days after concern eased that the European debt crisis will stall global economic growth and the yen pared its advance against the euro and dollar.
Canon Inc., a maker of consumer electronics that gets more than 80 percent of its sales outside Japan, gained 1.1 percent. Mitsubishi Corp., which gets about 40 percent of revenue from commodities, increased 2 percent after Daiwa Securities Group Inc. boosted its rating on the company, and oil and metal prices rose. Trend Micro Inc. jumped 10 percent after Taiwan’s DigiTimes newspaper reported the antivirus software maker may be the target of a takeover.
“Fading fear about the European deficit crisis is having a big impact on today’s stock market,” said Seiichiro Iwamoto, who helps oversee $35 billion in Tokyo at Mizuho Asset Management Co. “The sense of relief has caused the yen to fall against the euro and dollar.”
The Nikkei 225 Stock Average advanced 0.8 percent to 9,098.39 at the close of trading in Tokyo, with about four stocks gaining for each one that fell. The broader Topix index climbed 0.7 percent to 826.84.
Futures on the Standard & Poor’s 500 Index slipped 0.2 percent. Yesterday, the gauge gained 0.6 percent in New York as concern eased that Europe’s sovereign debt crisis will derail the global economic recovery.
Euro Climbs
The euro gained against the yen after Portugal’s sale of bonds due in 2021 attracted bids for 2.6 times the amount offered, compared with 1.6 times in the earlier March sale. An auction of five-year debt by Poland drew the most demand since 2008, while borrowing costs fell to the lowest level in four months after the government pledged to cut the budget deficit.
“There is a sense of relief about Europe, so there is a temporary pause in risk aversion,” said Mitsushige Akino, who oversees about $450 million in Tokyo at Ichiyoshi Investment Management Co. “Exporters may be bought as they were heavily sold yesterday.”
The Topix Electric Appliances Index and the Topix Transportation Equipment Index were the biggest contributors to gains among the Topix’s 33 industry groups.
Canon, the world’s largest camera maker, increased 1.1 percent to 3,550 yen. Toyota Motor Corp., which counts North America as its No. 1 market outside Japan, rose 1.9 percent to 2,930 yen and was the biggest contributor to the Topix advance. Fanuc Ltd., a robotics maker that receives about 80 percent of its revenue outside of Japan, climbed 1 percent to 9,550 yen.
Yen Depreciates
The yen depreciated to as much as 106.95 against the euro from 106.15 at the close of stock trading in Tokyo yesterday. Against the dollar, it fell to as much as 84.03 from 83.46. A weaker yen increases overseas income at Japanese companies when converted into their home currency.
The Topix’s gauge for trading houses gained after Daiwa raised its rating on the sector to “bullish” from “neutral,” citing low valuations and the improved outlook for trading companies in 2011 on eased concerns about the economic recovery.
The Topix Wholesale Trade Index, which includes Mitsubishi Corp. and Mitsui & Co. as its biggest members, trades at an average 7.3 times estimated earnings, compared with the broader Topix’s ratio of 14.7 times.
Mitsubishi Corp., Japan’s biggest trading company, rose 2 percent to 1,877 yen. Mitsui & Co., Japan’s No. 2, climbed 2.3 percent to 1,137 yen. Daiwa raised both companies to “outperform” from “neutral.” Sumitomo Corp., the No. 3, gained 2.7 percent to 1,027 yen.
Trend Micro
Crude oil for October delivery rose 0.8 percent, the first advance in three days, to settle at $74.67 a barrel yesterday on the New York Mercantile Exchange. The London Metal Exchange Index of six metals including copper and zinc gained 0.9 percent.
Trend Micro surged 10 percent to 2,576 yen, its biggest increase since April 2009 and the biggest contributor to the Nikkei 225’s advance.
The DigiTimes reported the company has been approached for a possible takeover. The newspaper cited the anti-virus computer software developer’s chief executive Eva Chen, who didn’t name a possible acquirer, and said the company isn’t ruling out accepting acquisition offers, the newspaper said. The Tokyo- based company has received no concrete acquisition proposals, Trend Micro said in a statement today.
Among stocks that fell, real estate companies declined the most as a group on the Topix after Miki Shoji Co., a privately held office broker, reported Tokyo’s office vacancy rate rose to a record in August amid increased competition to find tenants.
Mitsui Fudosan Co., Japan’s biggest developer, dropped 3.6 percent to 1,353 yen while its rival Mitsubishi Estate Co. declined 1.9 percent to 1,295 yen. Nomura Real Estate Holdings Inc., the property developer, lost 3 percent to 1,151 yen.
The Topix Real Estate Index sank 1.9 percent, reversing an earlier gain of 1.5 percent.
To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net
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