Japan’s Topix Rises From Two-Year Low, Led by Energy Companies on $100 Oil

Japanese stocks rebounded from a two-year low as Japan Petroleum Exploration Co. (1662) led energy companies higher after oil and metal prices rose.

Japan Petroleum, Japan’s second-largest oil explorer, advanced 3.6 percent. TDK Corp. (6762) soared 8.8 percent after agreeing to supply disk-drive heads to Western Digital Technologies. Olympus Corp. (7733) jumped as much as 19 percent after a report Japan’s top lenders said they would continue to support the scandal-hit company.

The Nikkei 225 (NKY) Stock Average increased 0.2 percent to 8,479.63 at the close, after falling as much as 0.7 percent. The Topix index rose 0.5 percent to 727.71. About nine stocks advanced for every five that declined. The gauge yesterday closed at its lowest level since March 12, 2009.

“After the end of earnings season, the market has been yo- yoing with people reacting to news one day that they forget the next day,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. “For today, people bought shares on high oil prices. Investors won’t be taking a firm position until we approach closer to the year-end when there’s a more concrete outlook on companies for next year.”

More than 90 percent of the 1,663 companies in the Topix index have posted quarterly results so far. Some 730 reported earnings growth, while 794 said profit shrank, according to data compiled by Bloomberg.

Oil, Metal Prices

The Topix index sank 19 percent this year amid concern Europe’s crisis is spreading and a global economic slowdown will hamper Japan’s export-led recovery. The decline has cut the price of shares on the index to 0.9 times estimated book value, compared with 1.08 times at the start of the year.

Japan Petroleum rose 3.6 percent to 3,050 yen today, while Inpex Corp. (1605), Japan’s top energy explorer by market value, advanced 1.2 percent to 492,500 yen. Mitsui & Co., a trading house that counts commodities as its biggest source of profit, increased 2.5 percent to 1,168 yen.

Crude for December delivery rose 3.2 percent to $102.59 a barrel in New York yesterday. The fuel slid as much as 97 cents to $101.62 a barrel today in electronic trading on the New York Mercantile Exchange.

The London Metal Exchange Index of prices for six industrial metals including copper and aluminum advanced 1.3 percent yesterday.

TDK, Olympus

TDK jumped 8.8 percent to 3,535 yen after a regulatory filing showed a unit of Western Digital Corp. has agreed to buy components from the Japanese maker of disk drive heads.

Olympus gained 1 percent to 747 yen. Japan’s largest lenders Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) told Olympus they will continue to support the company, the Mainichi newspaper said, citing an unidentified person.

Domestic demand-related shares including retail, food and telecommunication companies fell after the Bank of Japan cut its assessment of the economy yesterday.

Japan Tobacco Inc., Asia’s largest cigarette maker by market value, slid 1 percent to 381,000 yen, while KDDI Corp., a Japanese mobile-phone operator, fell 3.9 percent to 544,000 yen.

“There’s a slowdown in the macro economy, weighing on the market,” said Shintaro Takeuchi, who helps manage about $20 billion at Tokio Marine & Nichido Fire Insurance Co. “Japanese stocks are relatively cheap and the downside is limited.”

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

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

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