Japanese Stocks Advance as Global Manufacturing Growth Boosts Confidence

Japanese stocks rose, sending the Nikkei 225 Stock Average to a three-day advance, as expanding manufacturing in the U.S. and Europe boosted investor confidence in the global economic recovery.

Honda Motor Co. (7267), Japan’s second-largest carmaker by revenue, gained 1.8 percent after a jump in U.S. sales following an eight-month slump. Nomura Holdings Inc. (8604) soared 7.1 percent after posting an unexpected quarterly profit on asset sales even as trading commissions fell. Sharp Corp. declined the most on the Nikkei 225 after forecasting a record loss on slumping prices for its Aquos televisions.

“Yesterday’s manufacturing data was definitely good,” said Masaru Hamasaki, Tokyo-based chief strategist at Toyota Asset Management Co., which oversees the equivalent of $24 billion. “The global economy was largely swayed by European issues last year, but now it’s returning to a recovery phase.”

The Nikkei 225 rose 0.8 percent to 8,876.82 at the 3 p.m. close in Tokyo. The broader Topix (TPX) Index gained 0.6 percent to 762.45, with about three shares advancing for every two that dropped. The Tokyo Stock Exchange’s trading of 241 stocks including Sony Corp. (6758) and Hitachi Ltd. resumed at 12:30 p.m. local time after a technical glitch halted some transactions in the morning session.

Trading Halt

“There must have been people who were dying to trade Sony shares today,” said Kazuyuki Terao, chief investment officer at RCM Japan Co. “They would be left between a rock and a hard place if they were expecting bad news and couldn’t sell.”

Sony fell 2.6 percent to 1,328 yen after trading resumed. The consumer-electronics maker yesterday announced the replacement of Chief Executive Officer Howard Stringer as it faces its longest streak of annual losses since listing in 1958.

Futures on the Standard & Poor’s 500 Index added 0.3 percent today. The measure advanced gained 0.9 percent in New York yesterday after reports showed manufacturing in the U.S. grew at the fastest pace in seven months, while a gauge of U.K. factory activity jumped to an eight-month high and German output grew for the first time since September.

Honda climbed 1.8 percent to 2,722 yen, while Toyota Motor Corp. (7203) rose 1.8 percent to 2,906 yen on rising sales after U.S. demand for autos unexpectedly rose last month.

‘Confidence Improving’

“We have more confirmation that business confidence in the U.S. and Europe is improving,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo. “The European debt crisis is in a temporary lull, so stocks sensitive to the global economy will have a chance to gain.”

Shares also rose after Greek Finance Minister Evangelos Venizelos said yesterday the government is “one step from closing” a debt-swap deal with private bondholders, easing concern over Europe’s debt crisis.

The euro climbed as high as 100.70 yen today in Tokyo, compared with 99.61 yen at the close of stock trading yesterday, boosting the value of income at some Japanese exporters.

Of the 654 companies on the Topix that have posted results for the latest quarter so far this year, 79 have exceeded analysts’ estimates, while 127 have fallen short, according to data compiled by Bloomberg.

Brokerages Advance

Brokerages jumped the most among the Topix’s 33 industry groups. Nomura, Japan’s biggest company in the sector, soared 7.1 percent to 300 yen, the sharpest rise in Nikkei 225. (NKY) Net income climbed 33 percent to 17.8 billion yen ($233 million) for the three months ended Dec. 31 from a year earlier as profit rose as its sale of a restaurant chain outweighed falling investment banking fees. Analysts surveyed by Bloomberg had projected a 2 billion-yen loss. Daiwa Securities Group Inc. (8601) climbed 4.5 percent to 281 yen.

Sharp plunged by its daily limit of 100 yen, or 16 percent, to 528 yen, its lowest level in more than 31 years. Japan’s largest maker of liquid-crystal-display panels said it may suffer a loss of 290 billion yen in the year ending March 31, the biggest loss since it was founded a century ago. It had earlier forecast a 6 billion-yen profit.

Japanese earnings are weak because the yen’s strength and Thai flooding have compounded difficulties caused by the record March earthquake, Toyota Asset’s Hamasaki said.

Sumco Corp. (3436) tumbled 15 percent to 575 yen after the Nikkei newspaper reported the silicon-wafer maker will close two plants in Japan on sluggish demand for chips for televisions and computers. Sumco may also cut more than 1,000 jobs and take a 100 billion-yen charge for the restructuring, the report said, without citing a source.

The Topix (TPX) sank 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. Stocks also fell amid natural and nuclear disasters and a surge in the yen, cutting the price of shares on the index to 0.9 times book value.

The following were among the most active shares in the Japanese market today. Stock symbols are in parentheses after company names.

Itochu Corp. (8001) (8001 JT), a trading company, advanced 3.4 percent to 856 yen after boosting its full-year net-income forecast 17 percent to 280 billion yen, citing an expected recovery in domestic demand.

Konami Corp. (9766) (9766 JT), a video-game developer, sank 3.6 percent to 1,944 yen after saying operating profit rose 26 percent to 10.7 billion yen in the three months through December. Analysts had estimated an increase to 12.3 billion yen.

Kuraray Co. (3405) (3405 JT), a fiber maker, slumped 3.6 percent to 1,079 yen after cutting its operating profit forecast 5 percent to 57 billion yen in the year ending March 31, citing the weaker euro.

Mitsubishi Electric Corp. (6503) (6503 JT), a maker of electronic equipment, lost 3.7 percent to 657 yen, after cutting its full- year net-income forecast 26 percent to 100 billion yen.

NGK Insulators Ltd. (5334) (5333 JT) rose 2.7 percent to 1,016 yen after Daiwa Securities boosted the ceramic maker’s rating to “buy” from “outperform,” after operating profit in the nine months through December nearly reached NGK’s full-year target.

-- With assistance from Masaaki Iwamoto and Yoshiaki Nohara in Tokyo. Editor: Jim Powell.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

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

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