Japan Stocks Rise on U.S. Retail Data; Fed Lifts Outlook

March 14 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 Stock Average closing at its highest level since July, after U.S. retail sales jumped and the Federal Reserve raised its assessment of the world’s biggest economy.

Toyota Motor Corp. (7203) rose 2.1 percent after the yen fell to its lowest level against the dollar in almost a year, boosting the earnings outlook for Japanese exporters. Mitsubishi UFJ Financial Group Inc. (8306) paced gains among banks after the Fed said most of the largest U.S. lenders have enough capital to weather another recession. JFE Holdings Inc. (5411) led steelmakers higher as Credit Suisse Group AG recommended buying stocks in the sector. Sharp Corp. (6753) rebounded from a 32-year low after a report the money-losing electronics maker will name a new president.

“The U.S. economy is generating jobs again and that’s helping boost household income,” said Shane Oliver, Sydney- based head of strategy at AMP Capital Investors Ltd., which manages almost $100 billion. “Japan has benefited from the perception that the yen has peaked for now.”

The Nikkei 225 rose 1.5 percent to 10,050.52 at the 3 p.m. close of trading in Tokyo, the highest since July 26. The measure has risen 19 percent this year, the best performer among 24 developed markets this year, according to data compiled by Bloomberg.

The Topix Index, the country’s broadest equities gauge, gained 1.4 percent to 857.11 today, while the MSCI Asia Pacific Index excluding Japan advanced 0.5 percent.

U.S. Outlook

Futures on the Standard & Poor’s 500 Index (SPXL1) fell 0.2 percent today. The gauge advanced 1.8 percent yesterday in New York as the Dow Jones Industrial Average rose to its highest level since 2007. U.S. retail sales increased the most in five months, and the Fed lifted its assessment of the economy as the labor market gathers strength.

Toyota, Japan’s biggest carmaker, rose 2.1 percent to 3,485 yen, while Honda Motor Co. (7267) added 2.7 percent to 3,185 yen. Sony Corp. (6758), Japan’s leading exporter of consumer electronics, gained 5.2 percent to 1,790 yen.

Japanese shares rose and the currency weakened after Bank of Japan Governor Masaaki Shirakawa signaled yesterday that additional bond purchases aren’t off the table. The yen touched 83.32 against the dollar today, the lowest since April 15. The currency has depreciated about 6 percent against the greenback since the central bank on Feb. 14 surprised investors by expanding an asset-buying program.

Yen Eases

“The BOJ could be stronger, but nevertheless, their move, at least for the short-term, will change the direction of the yen from one of strength to one of weakness,” AMP Capital’s Oliver said.

Financial shares rose after the Fed yesterday said 15 of the 19 largest U.S. banks could maintain adequate capital levels even in a recession scenario. Mitsubishi UFJ gained 2.6 percent to 433 yen. Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest lender by market value, rose 2.5 percent to 2,865 yen.

Steelmakers advanced after Credit Suisse recommended the group, saying the quarter ending this month should be the industry’s “low point.” JFE Holdings climbed 6.1 percent to 1,801 yen. Kyoei Steel Ltd. (5440) gained 3.4 percent to 1,625 yen.

The Nikkei 225 Volatility Index (VNKY) rose 2.3 percent to 23.49, indicating traders expect a swing of about 7 percent on the benchmark gauge over the next 30 days. Trading volume on the index was 33 percent above its 100-day average, according to data compiled by Bloomberg.

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

Gree Inc. (3632) (3632 JT): The online gaming company fell 6 percent to 2,216 yen. Daiwa Capital Markets Co. cut its investment rating on the company to “neutral” from “buy.” The target price was lowered to 2,600 yen from 3,200 yen.

Maezawa Kasei Industries Co. (7925) (7925 JT), a maker of synthetic resin products, jumped 13 percent to 988 yen. The company raised its net-income forecast by 31 percent to 850 million yen ($10 million) for the year ending March 31, citing demand for materials to build temporary houses after last year’s record earthquake.

Sharp Corp. (6753) (6753 JT), a maker of consumer and industrial electronics, rose 4.3 percent to 531 yen after dropping to the lowest level since November 1979. Sharp reversed losses after the Nikkei newspaper reported a new president would be announced today. The company named Takashi Okuda as its head, the Nikkei reported separately after the market closed.

The stock fell earlier after iSuppli analyst Vinita Jakhanwal said the screen-maker failed to meet Apple Inc.’s quality requirements.

Sumco Corp. (3436) (3436 JT), a maker of silicon wafers for semiconductors, gained 3.5 percent to 981 yen. Bank of America Merrill Lynch raised its investment rating on the company to “buy” from “neutral,” saying a price increase for wafers will drive an abrupt rebound in earnings.

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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