Japan Stocks Rise Most in Two Weeks, Led by Banks; Renesas, Tepco Advance

Japanese stocks rose by the most in more than two weeks, led by lenders after a report that Mizuho Financial Group Inc. (8411) will merge its banks and as the yen weakened.

Mizuho, Japan’s third-biggest publicly traded lender, gained 3.2 percent. Tokyo Electric Power Co. advanced 2.4 percent after the company announced a revised plan for stabilizing its stricken Fukushima Dai-Ichi nuclear-power plant. Renesas Electronics Corp. (6723) leapt 5.8 percent after the Nikkei newspaper reported the chipmaker that supplies the country’s carmakers will resume operations at a plant damaged by the March 11 quake.

The Nikkei 225 Stock Average rose 1 percent to 9,662.08 at the 3 p.m. close of trading in Tokyo. The broader Topix index gained 1.1 percent to 837.96, with about six times as many stocks advancing as falling. Both gauges had the largest increase since May 2.

“The current level of the yen is giving a sense of ease in the market and supporting stocks,” said Seiichiro Iwamoto, who helps oversee about $35 billion in Tokyo at Mizuho Asset Management Co. “The report about Renesas is positive, because that means the issue of disrupted supply chains is going to be resolved. Uncertainties are decreasing.”

Photographer: Tomohiro Ohsumi/Bloomberg

Employees work on the trading room at the Tokyo Stock Exchange. Close

Employees work on the trading room at the Tokyo Stock Exchange.

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Photographer: Tomohiro Ohsumi/Bloomberg

Employees work on the trading room at the Tokyo Stock Exchange.

The yen fell ahead of a report tomorrow forecast to show Japan’s economy contracted in the first quarter. It depreciated to 116.41 against the euro, the weakest level since May 11. Against the dollar, Japan’s currency dropped to 81.59 from 81.40. A lower yen boosts the value of overseas income at Japanese companies when converted into their home currency.

Banks Advance

Banks were the biggest contributor to the Topix’s gain after the Nikkei newspaper reported Mizuho Financial Group will merge its retail and corporate banks by 2013. Mizuho climbed 3.2 percent to 131 yen. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest bank by market value, rose 2.4 percent to 386 yen. Sumitomo Mitsui Financial Group Inc. (8316), the second-biggest, increased 3.5 percent to 2,464 yen.

The Topix has lost 10 percent since March 10, the day before a magnitude-9 earthquake and tsunami devastated Japan’s northeast coast, disabled a nuclear power plant and disrupted supply chains at companies. Shares in the gauge traded at 0.94 times book value yesterday, the lowest level since April 19.

“Stocks are cheap in terms of valuations,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc.

Nuclear Plan

Tokyo Electric Power advanced for the first time in five days, gaining 2.4 percent to 389 yen. The company said it expects to cool reactors at its stricken Fukushima Dai-Ichi plant by as early as October, maintaining its earlier timetable in an updated plan to resolve the worst nuclear crisis in 25 years.

One month after releasing its so-called road map to stabilize the Fukushima plant, the company known as Tepco outlined more detailed steps at achieving a cold shutdown, where the core temperature in the three damaged reactors falls to below 100 degrees Celsius (212 degrees Fahrenheit).

Renesas Electronics jumped 5.8 percent to 744 yen. The company will start increasing its capacity to supply chip products by 20 percent a month from June after it halted production at a plant because of the March earthquake, the Nikkei newspaper reported. It aims to restore supply to the pre- earthquake level by the end of October, according to the report.

Inpex Corp. (1605), Japan’s largest energy exploration company, climbed 3 percent to 553,000 yen. The operator of the proposed Ichthys liquefied natural gas project in Australia said the Northern Territory government has allowed the venture to proceed.

Inpex and Japan Petroleum Exploration Co. (1662), Japan’s second- biggest oil driller, were boosted by higher oil prices. Crude for June delivery rose as much as 1.1 percent today to $98 a barrel in electronic trading in New York. Japan Petroleum increased 1.5 percent to 3,740 yen.

To contact the reporter on this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net.

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

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