Japan Stocks Jump as EU Makes Deal on Spain Bank Rescue
Japanese stocks advanced, sending the Nikkei 225 (NKY) Stock Average to the highest close since May 10, as euro-area leaders agreed to ease repayment rules for emergency loans to Spanish banks and relax potential aid for Italy at a regional summit dealing with the debt crisis.
Canon Inc. (7751), a camera maker that depends on Europe for almost a third of its sales, rose 1.8 percent. Nomura Holdings Inc. (8604) gained 3.9 percent ahead of a press conference today to discuss an internal probe on insider trading. Sparx Group Co. surged 18 percent after the asset manager won a state contract to start a renewable energy fund.
“Many investors didn’t expect European leaders to make any progress at the summit, but aggressive action was the result,” said Yoshihiro Ito, chief strategist at Okasan Online Securities Co. in Tokyo.
The Nikkei 225 rose 1.5 percent to 9,006.78 at the 3 p.m. close in Tokyo, with volume almost 20 percent above the 30-day average. The gauge has fallen 11 percent this quarter. The broader Topix (TPX) advanced 1.5 percent to 770.08, after earlier falling as much as 0.6 percent on a report Japan’s industrial production dropped the most since the 2011 earthquake.
Stocks rebounded after European Union President Herman Van Rompuy said leaders of the 17 euro countries dropped the requirement that governments get preferred creditor status on loans to Spain’s blighted banks. Lenders can also be recapitalized directly by bailout funds rather than going through governments, he said.
The deal comes after French President Francois Hollande put his nation’s endorsement of a German-backed deficit treaty on hold, and Italy and Spain withheld approval of a 120 billion- euro ($149 billion) regional growth package.
The euro surged as much as 1.4 percent against the yen after earlier falling as much as 0.3 percent, boosting the value of overseas income at some Japanese companies when repatriated.
Canon rose 1.8 percent to 3,165 yen. Makita Corp. (6586), a power- tool maker that gets almost half its sales in Europe, gained 2.2 percent to 2,773 yen.
The Topix has dropped about 12 percent from its peak on March 27 amid slowing growth in the U.S. and China as Europe’s sovereign-debt crisis spreads.
Nomura Holdings climbed 3.9 percent to 294 yen. Chief Executive Officer Kenichi Watanabe is expected to hold a news conference today in Tokyo to discuss an internal probe of allegations the brokerage leaked information used for share sales it managed in 2010. The securities firm is expected to cut the pay of top executives, including Watanabe, according to people with knowledge of the matter.
Sparx Group surged by its daily limit of 1,000 yen, or 18 percent, to 6,680 yen after securing a contract from the Tokyo government to start an infrastructure fund that will invest in the renewable energy, including solar plants and wind farms. The fund will start with initial capital of 1.5 billion yen ($19 million) as early as October and will expand to about 20 billion yen, Chief Executive Officer Shuhei Abe said.
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