Japan’s Nikkei Recovers to March 11, 2011 Closing Level

Japan’s Nikkei 225 Stock Average (NKY), after more than a year, recovered to the closing level on the day of the earthquake and tsunami that left 19,000 people dead or missing and triggered the worst nuclear disaster in 25 years.

Shares on the benchmark gauge surged 2.4 percent, the most in six months, to 10,255.15, rising in the final two seconds of trading above the closing price on March 11, 2011. Topix Index gained 2.4 percent to 872.42, the most among major equity gauges.

Japanese stocks led a global rally that came after Federal Reserve Chairman Ben S. Bernanke signaled a commitment to relaxed monetary policy. The advance got a boost because today was the last to buy shares and still get a dividend for about four-fifths of the 1,668 companies listed on the Topix.

“It is profound that the market has finally made back its losses, but we have a long way to go toward true reconstruction,” said Ayako Sera, a market strategist at Sumitomo Trust & Banking Co., which manages about $302 billion. “It took a long time, but honestly it was shocking the yen surged that much after the quake. The stronger yen had held the stock recovery back.”

Honda Motor Co. (7267), a carmaker that gets more than 80 percent of its sales abroad, rose 3.5 percent. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s top bank by market value, gained 4.3 percent after German Chancellor Angela Merkel signaled readiness to do more to tame Europe’s debt crisis. Sumitomo Metal Mining Co. jumped 5.9 percent after discovering a new gold deposit.

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The gauge added 1.4 percent in New York yesterday to close at its highest level since May 2008 after Bernanke said that while he is encouraged by a drop in the U.S. unemployment rate, the Fed needs to continue accommodative monetary policy to further cut joblessness.

Exporters Advance

Exporters gained, with Honda rising 3.5 percent to 3,270 yen. Toyota Motor Corp., Asia’s biggest carmaker by market value, increased 3.6 percent to 3,600 yen. Canon Inc., the world’s biggest camera maker, climbed 3.5 percent to 4,015 yen.

Finance shares gained after German Chancellor Merkel gave her first indication she is prepared to allow an increase in the debt-crisis firewall, saying that Germany could let the temporary and permanent rescue funds run in parallel. Mitsubishi UFJ gained 2.8 percent to 436 yen.

“The Fed’s stance to support the economic recovery through policy easing and adding liquidity to the market is helping boost sentiment,” said Tomomi Yamashita, a senior fund manager in Tokyo at Shinkin Asset Management Co., which oversees $6 billion. “Worries about Europe’s debt crisis are being swept away.”

Nikkei Rebound

The Nikkei 225 has risen about 25 percent since its low in November amid signs of a U.S. economic recovery, optimism on containing Europe’s debt crisis and additional monetary easing by the Bank of Japan. Shares in the Japanese benchmark are valued at 24.3 times estimated earnings on average, compared with 13.6 times for the S&P 500 and 11.2 times for the Stoxx Europe 600 Index.

Sumitomo Metal Mining rose 5.9 percent to 1,231 yen after the company said it found an additional deposit of as much as 40 tons of gold at its Pogo mine in Alaska.

Among the biggest gains on the Topix were small-cap developers. Hoosiers Corp. surged 12 percent to 74,000 yen, while Sun Frontier Fudousan Co. gained 11 percent to 17,640 yen.

Land Prices Surge

Property prices in Japan’s northeastern region that were hurt by the earthquake and tsunami gained the most last year as residents sought to relocate, the land ministry’s annual land price report showed last week.

“Expectations that housing demand, including condos, will rise boosted shares as a land-price recovery spurs expectations for economic expansion,” said Hideyuki Shinkai, a fund manager at Norinchukin Trust & Banking Co.

Kawasaki Heavy Industries Ltd. (7012), a transport equipment and heavy machinery maker, gained 4.8 percent to 263 yen. Nomura Holdings Inc. analyst Ryo Tazaki raised the stock’s rating on prospects for the U.S. motorcycle market to show its first operating profit in five years. He also upgraded the company on expectations Chinese construction machinery market has bottomed.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net.

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

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