Japanese Stocks Advance to Highest Close in Three Months on U.S. Jobs Data

Japanese stocks rose, driving the Nikkei 225 Stock Average to its highest level in more than three months, after a government report last week showed the U.S. added more jobs than forecast, and as commodity prices increased.

Honda Motor Co., Japan’s second-biggest carmaker that receives about 42 percent of its revenue from North America, climbed 3.3 percent as the yen weakened. Komatsu Ltd., the world’s second-largest maker of mining trucks and excavators, rose 4.7 percent. JX Holdings Inc., Japan’s biggest oil refiner and copper producer, jumped 6.3 percent after raising its full- year profit forecast. Resona Holdings Inc., Japan’s fourth- biggest bank, tumbled 8.6 percent, leading declines by lenders.

“The jobs report shows the U.S. economy is heading toward a mild recovery,” said Naoki Fujiwara, a fund manager in Tokyo who helps oversee $6 billion at Shinkin Asset Management Co. “Commodity prices have been strong, and they will probably stay steady for a while.”

The Nikkei 225 Stock Average increased 1.1 percent to 9,732.92, the highest close since July 28 and its fourth straight advance. The broader Topix index gained 0.8 percent to 841.74, with about three stocks climbing for each one that fell.

The Topix index climbed 3 percent last week, the biggest weekly gain since the period ended July 9, on optimism the U.S. Federal Reserve will succeed in stoking growth in the world’s biggest economy. Stocks in the gauge trade at an average 15 times estimated earnings, compared with 38.1 times at the start of the year.

Exporters Gain

Exporters climbed on optimism demand will increase in the U.S. Honda gained 3.3 percent to 2,975 yen, while Nissan Motor Co., Japan’s third-largest carmaker, advanced 2 percent to 779 yen. Sharp Corp., Japan’s largest maker of liquid-crystal displays, jumped 2.7 percent to 806 yen. Car and electronics makers were the biggest contributors to the Topix index’s advance.

Komatsu jumped 4.7 percent to 2,275 yen and was the most heavily traded stock by value in Japan. Fanuc Ltd., an industrial robot maker that receives about 12 percent of its revenue from the Americas, rose 3.1 percent to 12,420 yen. It was the largest contributor to the Nikkei 225’s gains.

Futures on the Standard & Poor’s 500 Index fell 0.3 percent today. The index climbed 0.4 percent on Nov. 5 after U.S. Labor Department figures showed payrolls climbed by 151,000, exceeding the median estimate of economists surveyed by Bloomberg News. Private payrolls that exclude government agencies also gained more than forecast, and the jobless rate held at 9.6 percent.

Exporters Climb

“The U.S. economy is recovering faster than market participants have thought,” said Akio Yoshino, who helps oversee the equivalent of $36 billion as chief economist at Amundi Japan Ltd. in Tokyo. “Expectations for the yen’s appreciation against the dollar are peeling off, boosting stocks and prompting investors to sell bonds.”

Exporters also gained as the yen weakened against the dollar. The yen depreciated to as much as 81.41 to the dollar today in Tokyo, compared with 80.81 at the close of stock trading on Nov. 5. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.

Commodity producers climbed after oil and metal prices increased. Mitsui & Co., the country’s No. 2 trading house by market value, rose 2.5 percent to 1,352 yen, while Sumitomo Metal Mining Co., Japan’s biggest gold producer, gained 2.3 percent to 1,410 yen. Nippon Light Metal Co., a rolled-aluminum products maker, surged 7.8 percent to 152 yen.

Commodities Gain

JX Holdings jumped 6.3 percent to 527 yen after raising its full-year net income forecast by 19 percent. It was the third- biggest contributor to the Topix index’s gains after Honda and Komatsu.

Crude oil for December delivery rose 0.4 percent in New York on Nov. 5 to $86.85 a barrel, the highest settlement price since Oct. 8, 2008. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum gained 0.3 percent, and gold futures surged to a record.

Credit Saison Co., a Japanese credit-card company, jumped 5.5 percent to 1,238 yen, after boosting its full-year net income forecast 33 percent.

A measure of banks, led by Resona, fell as much as 1.4 percent today, paring the Topix index’s advance briefly in the afternoon. The bank index closed 0.5 percent lower.

Regional Lenders Decline

Resona tumbled 8.6 percent to 468 yen, its lowest close on record and the steepest drop in the Nikkei 225. The lender said Nov. 5 it plans to sell as much as 600 billion yen of common stock over the next year, using the proceeds and 300 billion yen of reserves to buy back preferred stock from the government and retire the shares.

Regional lenders declined after Nomura Holdings Inc. lowered its ratings on “buy”-rated regional banks to “neutral,” except for Fukuoka Financial Group Inc. The brokerage also reduced their price estimates.

“We have lowered our investment ratings on regional banks, and we currently see few factors that are likely to push up share prices,” Masahiko Sato, an analyst at Nomura, wrote in a report dated Nov. 5. “We think profit recoveries in the sector have now run virtually their course.”

Gunma Bank Ltd. declined 2.9 percent to 400 yen, while Bank of Yokohama Ltd. dropped 2.2 percent to 398 yen. Hachijuni Bank Ltd. slid 2.1 percent to 414 yen, and Suruga Bank Ltd. lost 2.4 percent to 721 yen.

To contact the reporter for this story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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