Japan Stocks Advance After Yen Pares Gains, Lifting Outlook for Exporters

Japanese stocks rose, with the Nikkei 225 Stock Average (NKY) surging in the last half hour of trading today after the yen pared gains, boosting the outlook for exporters’ earnings.

Sony Corp. (6758), a consumer-electronics maker that earns about 70 percent of its revenue overseas, gained 0.7 percent. Mobile carrier Softbank (9984) Corp. jumped 3.2 percent before the government awards communications spectrum tomorrow. Elpida (6665) Memory Inc. plunged by its daily limit after the chipmaker yesterday filed for Japan’s biggest bankruptcy in two years.

“The stock markets are being swayed by the currency,” said Naoki Fujiwara, who helps oversee $6 billion at Shinkin Asset Management Co. in Tokyo. “They are buying back shares as the yen weakens from just 80 yen.”

The Nikkei 225 Stock Average rose 0.9 percent to 9,722.52 at the 3 p.m. close in Tokyo after falling as much as 1.1 percent earlier today. The broader Topix (TPX) Index rose 0.4 percent to 838.48, extending a six-month high.

Futures on the Standard & Poor’s 500 Index (SPXL1) gained 0.3 percent today. The gauge rose 0.1 percent in New York yesterday on better-than-estimated home sales and as financial shares rallied.

Yen Pares Gains

Exporters rebounded after the yen pared gains against the dollar to 80.53 at the close of stock trading today from as low as 80.02 earlier.

Sony gained 0.7 percent to 1,773 yen, reversing a 2.3 percent drop. Toyota Motor Corp. (7203), Japan’s biggest carmaker, added 0.2 percent to 3,385 yen after falling as much as 1.2 percent earlier.

Stocks rose even as Greece’s credit ratings were cut to “selective default” by Standard & Poor’s yesterday after the debt-strapped nation negotiated the biggest sovereign debt restructuring in history.

Information and communication companies gained the most among the Topix’s 33 industry groups after the government said it will choose the winner of the 900-megahertz spectrum license auction tomorrow.

Softbank Rises

Among the bidders, Softbank rallied 3.2 percent to 2,435 yen, and KDDI Corp. rose 2.2 percent to 518,000 yen.

Elpida declined the most among the Topix’s 1,668 companies after filing for bankruptcy protection with 448 billion yen of debt. The manufacturer of dynamic random access memory chips plunged by its daily limit of 80 yen, or 24 percent, to 254 yen. Elpida will be delisted on March 28, according to the Tokyo Stock Exchange.

The bankruptcy “came as a surprise because people expected the government to support Japan’s only DRAM maker,” Shinkin Asset’s Fujiwara said.

The Topix (TPX) has risen 6.6 percent since Feb. 14, when the Bank of Japan increasing its government-bond purchases, weakening the yen. The gain has boosted the value of stocks listed on the Topix to 1.03 times estimated book value, up from 0.88 in December, according to data compiled by Bloomberg. A number below 1 means companies can be bought for less than value of their assets.

-- With assistance from Toshiro Hasegawa in Tokyo. Editors: Jim Powell, Jason Clenfield.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

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

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