Japan Stocks Advance as U.S. Economic Data Raises Confidence in Recovery

Feb. 24 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average advancing for a third week, after U.S. jobs and housing data beat estimates, boosting confidence in the global economic recovery.

Sony Corp. (6758), Japan’s leading exporter of consumer electronics, rose 3 percent. Inpex Corp. (1605), the nation’s biggest energy explorer, led stocks in the sector higher after crude prices advanced for a seventh day. Yaskawa Electric Corp. (6506) slipped after a report that AIJ Investment Co., a company that manages some of its money, could not account for 200 billion yen ($2.5 billion) in client funds.

The benchmark Nikkei 225 gained 0.5 percent to 9,647.38 as of the 3 p.m. trading close in Tokyo, rising 2.8 percent this week. The broader Topix Index climbed 0.6 to 834.29, its highest close since Aug. 2.

“Investors will be comfortable the recovery in the U.S. this time around has a better chance of surviving and thriving,” said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd. in Sydney. “Improved risk appetite economic fundamentals will create a catalyst that’s been lacking despite attractive valuations.”

U.S. Jobs, Housing

Futures on the Standard & Poor’s 500 Index (SPXL1) rose 0.2 percent today. The gauge added 0.4 percent in New York yesterday as applications for initial unemployment benefits in the U.S. held at a four-year low. Another report showed housing prices advanced 0.7 percent in December, beating projections.

Exporters to the U.S. gained, with Sony adding 3 percent to 1,740 yen. Honda Motor Co. (7267), a carmaker that counts North America as its biggest market, rose 2.7 percent to 3,090 yen.

Stocks maintained gains after Moody’s Investors Service said it hasn’t reached the point where it needs to downgrade Japan’s sovereign-debt rating.

Mining firms rose the most among the 33 Topix industry groups after oil for April delivery increased as much as 0.8 percent to $108.70 a barrel, the since May 4. Inpex gained 5.1 percent to 603,000 yen, while Japan Petroleum Exploration Co. (1662) climbed 2.9 percent to 4,065 yen.

Regulators Shut AIJ

AIJ Investment Advisors, which counts Yaskawa Electric and Advantest Corp. (6857) as clients, is unable to account for 200 billion yen in pension assets and is suspected to have lied about returns, according to a Nikkei newspaper report that cited no sources. The Financial Securities Agency today ordered the fund manager to halt operations, effectively freezing clients’ assets.

Yaskawa Electric, which manufactures industrial robots, dropped 0.8 percent to 790 yen. The company said AIJ manages about 2 percent of its pension funds.

“I don’t think the story about AIJ will have much of an impact on the market, but it may put investors in a wait-and-see mode,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion.

The Nikkei 225 Volatility Index (VNKY) dropped 1.8 percent to 20.97, indicating traders expect a swing of about 6 percent on the benchmark gauge over the next 30 days.

The Topix has risen 6 percent since Feb. 14, when the Bank of Japan joined a global spree of monetary easing by increasing its government-bond purchases, weakening the yen. The MSCI Asia Pacific Index excluding Japan has risen 1.6 percent over the period.

The gain has boosted the value of the stocks listed on the Topix to 1 times estimated book value, up from 0.8 in November, according to data compiled by Bloomberg. A number below 1 means companies can be bought for less than value of their assets.

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

J. Front Retailing Co. (3086) (3086 JT) rose 1.5 percent to 397 yen. The department-store operator plans to buy rival Parco Co. (8251 JT) for 30 billion yen, paying 1,100 yen per share, a 61 percent premium to yesterday’s close, the Nikkei newspaper reported without citing anyone. Parco gained 15 percent to 782 yen.

Sega Sammy Holdings Inc. (6460) (6460 JT), a maker of video-game machines, climbed 2.1 percent to 1,545 yen after agreeing to buy Phoenix Resort from RHJ International SA for 400 million yen in cash. RHJ will also be reimbursed for 878 million yen in loans granted to Phoenix Resort.

To contact the reporters 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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