Japan Stocks Rise as Yen’s Slide Lifts Exporters’ Outlook; Elpida Plunges

Japanese stocks rose, sending the Nikkei 225 (NKY) Stock Average to a six-month high, as a falling yen boosted the earnings outlook for exporters. Elpida Memory Inc. touched its lowest price in almost eight years after the debt- laden chipmaker said it may not survive.

Toyota Motor Corp. (7203), the world’s biggest carmaker by market value, climbed 4.7 percent as the yen fell against the dollar after the Bank of Japan expanded an asset purchase program. Tokio Marine (8766) Holdings Inc. jumped 5.7 percent after insurer maintained its full-year profit forecast as rivals cut their outlooks. Elpida plunged as much as 21 percent, touching its lowest price since November 2004, after saying it hasn’t secured financing to stay in business as an April debt deadline nears.

The Nikkei 225 advanced 2.3 percent to 9,260.34 at the 3 p.m. close in Tokyo, its highest close since Aug. 5. The broader Topix (TPX) Index increased 2 percent to 802.96, with more than three stocks rising for each that fell.

“The BOJ’s monetary easing was a positive surprise, depreciating the yen and boosting Japanese stocks,” said Masayuki Kubota, who helps manage about $1.7 billion at Daiwa SB Investments Ltd. “The markets’ real concern is if the Greek issues spread to Italy or Spain. As long as those two countries take steps toward solving their debt problems, the markets are alright, even if Greece has a hard landing.”

China Involvement

Shares extended gains after People’s Bank of China Governor Zhou Xiaochuan said today that the country will help resolve Europe’s debt crisis by investing in bailout bonds that could help stabilize its largest export market.

Futures on the Standard & Poor’s 500 Index rose 0.5 percent today. The gauge lost 0.1 percent in New York yesterday after U.S. retail sales rose less than expected. Stocks pared a decline of as much as 0.8 percent on optimism Greece will commit to budget cuts needed to secure a second bailout. Stocks also fell after U.S. retail sales rose less than expected.

In Europe, leaders of Greece’s two biggest political parties today are expected to provide European leaders written commitments to back austerity measures needed to secure aid, a government official said yesterday. Finance ministers canceled a Brussels meeting slated for today and will hold a teleconference instead to prod Greece to clinch the 130 billion euro ($170 billion) rescue package.

Exporters Surge

“Expectations are mounting that another bailout for Greece will be executed soon,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “The yen is retreating and the world is moving toward more monetary easing as shown by the BOJ, supporting equities.”

Exporters rallied as the yen touched 78.67 per dollar today, the lowest since Nov. 1. Demand for Japan’s currency fell yesterday after the central bank unexpectedly expanded its bond purchase program to bolster growth. A weaker yen boosts the overseas earnings of Japanese companies.

Toyota climbed 4.7 percent to 3,265 yen. Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, advanced 5.7 percent to 1,575 yen. Fanuc Corp. (6954), a maker of industrial robots, increased 4.3 percent to 14,020 yen.

Tokio Marine, Medipal

Tokio Marine jumped 5.7 percent to 2,157. The insurer maintained its full-year net income forecast of 10 billion yen even after rivals predicted losses on damage claims stemming from Thailand’s floods. Nomura Holdings Inc. raised its target price on the stock to 2,710 yen from 2,500 yen, keeping its “buy” rating.

Medipal Holdings Corp. (7459) gained 5.6 percent to 966 yen, set for its highest close since October 2010, after saying it will spend as much as 10 billion yen ($127.4 million) buying back shares.

The Topix (TPX) has rallied 10 percent since the beginning of the year on signs the U.S. economy is improving, amid bets central banks will ease monetary policy to spur growth, and on optimism Europe will contain its debt crisis. Of the 1,540 companies on the gauge that reported earnings since Jan. 9, 272 missed analysts’ estimates, while 138 surpassed expectations, data compiled by Bloomberg showed.

Elpida ‘Uncertainty’

Among stocks that declined, Elpida dropped 14 percent to 320 yen after earlier touching 294 yen, its lowest since November 2004. The company said there is “uncertainty” about its future as it hasn’t reached a financing deal with the trade ministry, the Development Bank of Japan and its main lenders.

The Tokyo-based chipmaker’s ability to repay 92 billion yen in bonds and loans by an April deadline is made more difficult by plunging chip prices and five straight quarters of losses.

“The chip industry is in trouble,” said Edwin Merner, president of Tokyo-based Atlantis Investment Research, which manages $300 million. “Most commodity-type chip companies are losing money and the business continues to be capital intensive.”

Yahoo Japan Corp. (4689), the operator of Japan’s most-visited Internet portal, sank 3.7 percent to 25,070 yen. Yahoo Inc.’s discussions to sell its stake in Alibaba Group Holding Ltd. and its Japanese operations in a tax-efficient manner have reached an impasse, according to a person briefed on the matter.

The Nikkei 225 Volatility Index rose 4.9 percent to 20.54, indicating traders expect a swing of about 5.9 percent on the benchmark gauge over the next 30 days.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

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

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