Japanese Stocks Advance After Tankan Beats Estimates

Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average headed for its highest close in almost two months, after manufacturing gauges in Japan and China topped estimates and European agreements on the debt crisis lifted investor confidence.

Nissan Motor Co. rose 1.2 percent after a Bank of Japan survey showed the country’s largest makers of cars and electronics were less pessimistic than economists expected. TDK Corp. (6762), a maker of electronic parts which gets almost 30 percent of its revenue from China, gained 1.6 percent after an official measure of mainland manufacturing growth beat estimates. Nippon Yusen K.K. jumped 3.4 percent on a plan to double sales at the shipping line’s logistics operations.

The Nikkei 225 rose 0.4 percent to 9,040.35 as of 12:34 p.m. in Tokyo, set for the highest close since May 9. The Topix (TPX) Index added 0.3 percent to 772.12, with three shares rising for every two that fell. The measure rose for a fourth day as the yen weakened against the euro and Spanish and Italian bond yields fell after last week’s European summit.

“Markets are shifting to a risk-on mood,” said Hiroshi Fujimoto, a fund manager at Tokyo-based Shinkin Asset Management Co., which oversees the equivalent of $6.6 billion. “There’s a lot less uncertainty about the European situation, at least in the near term.”

The Topix has rebounded about 11 percent since June 4, when the index fell to its lowest level since 1983. Stocks rose after Greek voters elected pro-bailout parties and European leaders struck deals to contain the debt crisis.

Shares on Japan’s broadest equities gauge traded at an average of 1.1 times book value, compared with 2.2 times for the Standard & Poor’s 500 Index and 1.4 times for the Europe Stoxx 600 Index. A number less than one means that companies can be bought for less than value of their assets.

S&P Futures

Futures on the S&P 500 Index slid 0.1 percent today. The gauge jumped 2.5 percent, the most in 2012, on June 29 after European leaders agreed to relax conditions on emergency loans for Spanish banks and make it easier to recapitalize the region’s troubled lenders.

“Investors are now in a situation to take risks,” said Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities Co. in Tokyo. “The European Central Bank may lower interest rates this week.”

Economists expect the ECB to lower its benchmark interest rate by at least 25 basis points to a record low of 0.75 percent on July 5, according to the median estimate of 57 analysts surveyed by Bloomberg News.

Japan’s Tankan

Makers of cars and electronics rallied after the central bank’s quarterly Tankan index of sentiment among large manufacturers rose to minus 1 in June from minus 4 in March. The median estimate of 19 economists surveyed by Bloomberg News was for a reading of minus 4. A negative number means pessimists outnumber optimists.

Nissan (7201), Japan’s second-biggest carmaker by sales, advanced 1.2 to 757 yen. Toshiba Corp. which makes computers, home appliances and nuclear power plants, climbed 1.7 percent to 305 yen.

Companies that do business in China rose after a government manufacturing gauge dropped less than economists expected. The Purchasing Managers’ Index fell to 50.2 in June from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said. The number beat the 49.9 median estimate in a Bloomberg News survey of analysts. A reading above 50 indicates expansion.

TDK climbed 1.6 percent to 3,250 yen. Murata Manufacturing Co., an electronic-parts maker that gets the highest proportion of sales in China among Topix Index companies, rose 1.8 percent to 4,230 yen.

Nippon Yusen jumped 3.4 percent to 216 yen after President Yasumi Kudo said freight-forwarding and warehousing businesses led by unit Yusen Logistics Co. will boost sales to 800 billion yen ($10 billion) within seven years.

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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