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Japan’s Topix Index Gains for Sixth Day Amid Signs of Progress on EU Debt

Japanese stocks edged up, sending the Topix (TPX) Index up for a sixth day, as proposals from European Union finance ministers to tame the debt crisis reassured investors, boosting the outlook for Asian exporters.

Nintendo Co., a Japanese maker of video-game consoles that gets more than a third of its sales in Europe, rose 1.5 percent after the euro gained against the yen. Inpex Corp. (1605), Japan’s top oil explorer, climbed 2.2 percent after crude prices advanced. Nippon Steel Corp. (5401) led the sector downward, sinking 3 percent after JPMorgan Chase & Co. cut the company’s target price.

The Topix, Japan’s broadest equity gauge, added 0.1 percent to 757.40 at the 3 p.m. close in Tokyo, its longest winning streak since September. About three stocks declined for every two that gained. The Nikkei 225 Stock Average rose 0.2 percent to 8,785.33.

“The worst scenario that Greece will break away from the euro region is gone, easing excessive worries about the European debt issues,” said Fumiyuki Nakanishi, a strategist at Tokyo- based SMBC Friend Securities Co. “Globally, a feeling of confidence to buy stocks is emerging.”

The Topix (TPX) tumbled 19 percent last year amid concern U.S. growth is sputtering and Europe’s debt crisis will damage the banking system, damping demand in two of Japan’s biggest export markets. The decline has cut the price of shares on the index to 0.9 times book value. That compares with 2.1 times for the Standard & Poor’s 500 Index in the U.S. and 1.4 times for the Europe Stoxx 600 Index.

Futures on the Standard & Poor’s 500 Index slid 0.3 percent today. The measure added 0.1 percent in New York yesterday, rising for a fifth day, as energy and finance shares advanced and investors weighed developments in Europe’s efforts to tackle its debt.

Euro Bailout Fund

Euro-area finance ministers agreed yesterday on the region’s permanent rescue fund, the European Stability Mechanism, based on a proposal by Finland. A government official in Berlin said Germany may be open to combining Europe’s two bailout mechanisms and boosting their funding limit.

Japanese stocks fluctuated after European finance ministers today balked at putting up more public money for Greece, seeking to fill a deeper-than-expected Greek financing hole by saddling investors with a lower interest rate on exchanged bonds.

“Investors are in wait-and-see stance on the Greek issue,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion.

Exporters Climb

The 17-country currency strengthened, lifting shares of exporters to Europe. Nintendo rose 1.5 percent to 10,760 yen. Kyocera Corp. (6971), an electronics maker that gets almost a fifth of its sales in Europe, climbed 0.6 percent to 6,550 yen.

The euro appreciated to as high as 100.49 yen today in Tokyo, compared with 99.34 at the close of stock trading yesterday, boosting the value of some overseas income at Japanese companies when repatriated.

“The euro is strengthening above 100 yen, which may appeal to investors” in Japanese exporters’ stocks, said Daiwa Asset Management’s Nagano.

Inpex gained 2.2 percent to 517,000 yen. Japan Petroleum Exploration Co., the nation’s second-largest oil explorer by market value, rose 1.4 percent to 3,380 yen.

Oil yesterday rose for the first time in four days after the European Union agreed to ban crude imports from Iran, raising concern that retaliation from the Islamic republic may disrupt the oil supply in the Middle East. Crude for March delivery climbed 1.3 percent to settle at $99.58 a barrel in New York yesterday.

Elpida Advances

Elpida Memory Inc. advanced 4.6 percent to 367 yen after a report the chipmaker is in merger talks with Micron Technology Inc. and Nanya Technology Corp, the Yomiuri newspaper said, without citing a source. The paper also reported Elpida needs 92 billion yen ($1.2 billion) to repay loans and bonds due as early as March.

“The report isn’t factual,” the chipmaker said in a statement today.

Steelmakers declined the most in the 33 Topix industry groups today. Sector leader Nippon Steel sank 3 percent to 197 yen after JPMorgan Chase trimmed its price estimate to 240 yen from 250 yen, saying earnings are likely to be pressured by deteriorating profit on exports and domestic products. JFE Holdings Inc. (5411) fell 1.1 percent to 1,444 yen after its target price was also cut by the investment bank.

Sony Corp. (6758) was the biggest drag in the Topix among its 1,660 members, falling 2.4 percent to 1,388 yen after the Nikkei newspaper reported the electronics maker offered to buy as much as 30 percent of scandal-hit Olympus Corp. as part of a proposed business alliance.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net

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