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Japan’s Nikkei 225 Closes Above 9,000 After Toyota Lifts Earnings Forecast

Feb. 8 (Bloomberg) -- Japanese shares rose, with the Nikkei 225 (NKY) Stock Average closing above 9,000 for the first time since October, as Toyota Motor Corp. raised its earnings forecast and a drop in the yen boosted the outlook for exporters.

Toyota, Japan’s biggest company by revenue, jumped 5 percent. Renesas Electronics Corp. (6723) surged 10 percent after a report it’s in talks to merge chip units with Panasonic Corp. (6752) and Fujitsu Ltd. (6702) JFE Holdings Inc. (5411) led steelmakers higher after ArcelorMittal, the world’s top maker of the material, forecast improvement in the first half.

The Nikkei 225 rose 1.1 percent to 9,015.59 as of 3 p.m. in Tokyo, its highest close since Oct. 28. The broader Topix (TPX) Index gained 1.2 percent to 782.34 with more than four stocks rising for each that fell. The gauge ended the day at its highest level since Aug. 8.

“It’s amazing that Toyota (7203) is forecasting net income of 200 billion yen even after all of these unusual circumstances -- the earthquake, Thai floods, Europe’s debt crisis,” saidMasaru Hamasaki, who helps oversee $24 billion as chief strategist at Toyota Asset Management Co. in Tokyo. “I think we’ll see an earnings rebound across the auto sector and for manufacturers in general.”

Automakers Advance

Toyota rose 5 percent to 3,135 yen. The nation’s biggest carmaker yesterday raised its forecast for full-year net income to 200 billion yen ($2.6 billion). It plans to roll out 19 new models in the U.S. and is targeting record global sales. Mazda surged 7.3 percent to 147 yen after saying it plans a 25 percent increase in its dealerships in China, according to a Nikkei report. The company’s shares fell by about 40 percent last year.

The Topix (TPX) has risen 7.4 percent this year even as companies including Toyota have missed earnings estimates. Of 1,094 companies in the index that have reported since Jan. 9, 219 missed analysts’ estimates while 106 beat them, according to data compiled by Bloomberg. Toyota’s stock has risen even after its forecast fell short of the average analyst estimate by 30 percent, or 85.4 billion yen.

“Investor attention is completely shifting to the next fiscal year” starting in April, said Yoshihiro Ito, chief strategist at Okasan Online Securities Co. in Tokyo. “Unless a negative surprise is very big, they are buying on the ground that all bad factors have come out. That’s pushing up Toyota.”

The Topix’s rise has boosted the price of companies on the measure to 0.94 times estimated book value, up from 0.85 in November, according to data compiled by Bloomberg. A number below one means investors can buy companies for less than the value of their assets.

Renesas Rises

Renesas gained 10 percent to 556 yen after the Nikkei newspaper reported without citing a source that the component maker, Fujitsu and Panasonic may agree to join their large-scale chip operations by March 2013. Fujitsu added 2.9 percent to 391 yen, while Panasonic rose 3.3 percent to 657 yen.

Iron and steel makers led gains among the 33 industry groups on the Topix. JFE Holdings jumped 6.7 percent to 1,503 yen. Nippon Steel Corp. (5401) gained 5.6 percent to 206 yen, and Sumitomo Metal Industries Ltd. (5405) advanced 5.7 percent to 148 yen.

TBK Co. (7277) surged 15 percent to 461 yen. The maker of pumps and brakes boosted its full-year net income forecast 28 percent to 2.3 billion yen, saying Thailand’s floods had less impact on its supply chain than expected. It also raised its second-half dividend to 7 yen per share from 5 yen.

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The benchmark gauge rose 0.2 percent in New York yesterday as Greece made progress on measures to secure international aid.

Greek Negotiations

Greek Prime Minister Lucas Papademos postponed a meeting with heads of political parties supporting his government a second time in as many days as he continued to haggle with international creditors over terms to secure aid.

“The Greek debt situation will be resolved in some shape or form,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “By eliminating part of that downside risk, people are more comfortable in allocating toward risky assets.”

The yen dropped against all of its 16 major counterparts today. A weaker yen boosts the value of Japanese exporters’ earnings abroad when repatriated back home.

Exporters to Europe rose. Canon Inc. (7751), a camera maker that depends on Europe for almost a third of sales, rose 1.5 percent to 3,445 yen. Nintendo Co. (7974), a video-game company that generates more than a third of its sales in Europe, rose 1.5 percent to 10,710 yen.

The Nikkei 225 Volatility Index rose 3.1 percent to 21.01, indicating traders expect a swing of about 6 percent on the benchmark gauge over the next 30 days.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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