Japanese Stocks Advance on U.S. Jobless Report, Weaker Yen; Canon Climbs
Sept. 10 (Bloomberg) -- Ed Rogers, chief executive officer at Rogers Investment Advisors K.K., a Tokyo-based fund-of-hedge-funds adviser, talks about the outlook for the Japanese economy, and investing in the nation's stocks through hedge funds. Japan’s economy slowed less than initially estimated in the second quarter as companies boosted capital spending, indicating the nation’s recovery was intact before a surge in the yen threatened to stunt export gains. Rogers also discusses the prospects for Japan's political landscape. He talks with Rishaad Salamat on Bloomberg Television. (Source: Bloomberg)
Japanese stocks rose, sending benchmark gauges to their second straight weekly gain, as fewer people than estimated applied for jobless benefits in the U.S. and after the yen weakened.
Canon Inc., the world’s largest camera maker, surged 5.6 percent on a share buyback plan. Nippon Yusen K.K., Japan’s biggest shipping line by sales, rose 1.5 percent on cargo rates. Fast Retailing Co., Japan’s No. 1 clothing retailer, jumped 5.6 percent after the Nikkei newspaper said China will allow foreign companies in the country to sell online. Stocks also rose as Japan’s economy grew more than initially estimated, and Prime Minister Naoto Kan unveiled details of his stimulus plan.
“The yen’s depreciation is supporting Japanese stocks,” said Ikuo Mitsui, who helps manage $270 million at Vivace Capital Management Co. “Also expectation some political measures will boost the economy encouraged investors to buy stocks.”
The Nikkei 225 Stock Average rose 1.6 percent to 9,239.17 at the 3 p.m. close in Tokyo. The broader Topix index gained 0.8 percent to 833.72 with more than twice as many stocks advancing as falling. For the week, the Nikkei has increased 1.4 percent while the Topix is up 1.2 percent.
Futures on the Standard & Poor’s 500 Index gained 0.1 percent today. In New York, the index rose 0.5 percent to 1,104.18 as a bigger-than-estimated decrease in jobless claims bolstered optimism in the economic recovery.
U.S. Jobs
The Topix has declined 8.1 percent in 2010, compared with a drop of 1 percent by the S&P 500 and a gain of 4.4 percent by the Stoxx Europe 600 Index. Stocks in the Japanese benchmark are valued at 14.9 times estimated earnings, compared with 13.3 times for the S&P and 11.9 times for the Stoxx.
Initial claims for unemployment benefits in the U.S. fell by 27,000 to 451,000 last week, Labor Department figures showed yesterday, trailing the median estimate of 470,000 in a Bloomberg survey of economists. The trade deficit shrank 14 percent, the most since February 2009, to $42.8 billion, Commerce Department figures showed yesterday. Economists forecast a gap of $47 billion, according to the survey median. Exports rose 1.8 percent to $153.3 billion, a two-year high.
“Recovery in corporate earnings in the U.S. is driving an increase in employment in the private sector,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Concern about the economy has eased.”
Yen Weakens
The yen depreciated to as much as 84.29, compared with 83.64 against the dollar at the close of stock trading in Tokyo yesterday. Against the euro, Japan’s currency dropped to 106.80 from 106.16. The weaker yen boosts the value of sales generated overseas in local terms for Japanese companies.
Canon jumped 5.6 percent to 3,750 yen, leading stocks in the Nikkei. Toyota Motor Corp., the world’s biggest carmaker, rose 0.7 percent to 2,951 yen and was the second-biggest support for the Topix. Sony Corp., an electronics maker that derives almost 70 percent of its sales outside Japan, advanced 1.7 percent to 2,525 yen.
Canon plans to buy back as much as 1.2 percent of its outstanding shares for up to 50 billion yen, according to a statement to the Tokyo Stock Exchange yesterday.
The company’s plan “is backed up by its confidence in its earnings,” Masahiro Shibano, an analyst at Citigroup Global Markets Japan Inc., wrote in a Japanese-language report dated yesterday. He maintained his rating on the company at “buy.”
Japan’s Economic Growth
Japan’s economy grew at an annualized 1.5 percent rate in the three months through June, faster than the 0.4 percent reported last month, the Cabinet Office said today in Tokyo. The median of 21 estimates in a Bloomberg News survey of economists was for a 1.5 percent expansion.
“The GDP figure slightly eased concerns that Japan’s economy will falter, but it didn’t cause us to change our outlook that the economy remains in a mild slowdown in terms both domestic and overseas demand,” Mitsumaru Kumagai, chief economist at Daiwa Institute of Research in Tokyo wrote in a Japanese-language report.
A statement from the Japanese government said today about 450 billion yen will be used to spur consumer spending through incentives to buy energy-efficient appliances and housing materials as well as lowering certain mortgage loans, as part of a 920 billion yen stimulus plan that was announced by Japanese Prime Minister Naoto Kan. Some 175 billion yen will be spent to increase medical, health and tourism jobs, according to the statement.
Fast Retailing, JT
Fast Retailing, Japan’s biggest clothing retailer, leapt 5.6 percent to 11,790, the second-largest increase in the Nikkei 225. The Nikkei newspaper said the Chinese government will allow foreign companies that have stores in China to sell products online.
Japan Tobacco Inc., the world’s third-largest publicly traded cigarette maker, jumped 4.1 percent to 278,000 yen and was the third-largest contributor to the Topix’s gain. The company’s Tanzanian unit, the largest cigarette maker in the East African nation, said profit in the first half through June surged 89 percent as revenue advanced.
Shipping lines had the fourth-largest increase among the Topix’s 33 industry groups after the Baltic Dry Index, a measure of shipping costs for commodities, rose for a ninth consecutive day yesterday. Nippon Yusen advanced 1.5 percent to 337 yen. Mitsui O.S.K. Lines Ltd., the second-largest, climbed 2 percent to 563 yen. Kawasaki Kisen Kaisha Ltd., the No. 3, rallied 1 percent to 317 yen.
To contact the reporter for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net.
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