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Japanese Stocks Advance on U.S. Retail Expectations, BOJ

Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average rising the first time in three days, as minutes from the Bank of Japan showed policy makers weren’t ruling out any options to boost the economy and on expectations U.S. retail sales rose in July.

Uniden Corp. (6815), an electronic equipment maker that counts North America as its biggest market, climbed 5.9 percent. Makita Corp. (6586), a maker of power tools that gets more than 40 percent of its sales in Europe, rose 1.9 percent after the yen weakened. Keisei Electric Railway Co. soared 6 percent after its price estimate was raised by Nomura Holdings Inc. Nippon Yusen K.K., Japan’s top shipping line, slid 1.7 percent after the sector’s rating was cut to neutral by JPMorgan Chase & Co.

The Nikkei 225 rose 0.5 percent to 8,929.88 at the 3 p.m. close in Tokyo. Volume was about even with the 30-day average even as many traders took the week off for the O-bon holiday. The broader Topix (TPX) Index added 0.4 percent to 749.53 today, with more than three times as many shares advancing as falling.

“The markets don’t have many catalysts today,” said Yoshihiro Ito, chief strategist at Okasan Online Securities Co. in Tokyo. “The yen is slightly weakening, which is boosting shares, and the situation abroad is calming down, including in the U.S.”

The Topix has fallen 14 percent from this year’s peak on March 27 on concern earnings would be hurt by Europe’s debt crisis and slower growth in China and the U.S. The decline has cut the price of shares on the gauge to 0.9 times book value, compared with 2.2 for the Standard & Poor’s 500 Index and 1.5 for the Europe Stoxx 600 Index. A number less than one means companies can be bought for less than the value of their assets.

Yen Weakens

Shares rose today after Japan’s currency slid against all 16 major counterparts, boosting the value of overseas income for exporters. The yen fell as low as 78.46 to the dollar today in Tokyo, compared with 78.30 at the close of stock trading yesterday, and weakened to as low as 96.96 against the euro from 96.17.

Makita rose 1.9 percent to 2,832 yen. Shimano Inc., a bicycle parts maker that gets more than 35 percent of its sales in Europe, jumped 4 percent to 5,720 yen.

The Bank of Japan is weighing ways to expand stimulus and prop up growth, according to minutes from a meeting last month released today. Governor Masaaki Shirakawa and his colleagues refrained from addition easing at the meeting, expanding an asset-purchase program, while cutting its loan facility by the same amount.

U.S. Retail

Exporters to North America gained on expectations U.S. retail sales rose in July for the first time in four months as employment picked up, economists said ahead of the Commerce Department report today. The projected 0.3 percent advance follows a 0.5 percent drop in June, according to the median forecast of economists surveyed by Bloomberg News.

Uniden soared 5.9 percent to 181 yen. Noritsu Koki Co., a photo-processor maker that generates almost 40 percent of its sales from North America, added 1.7 percent to 353 yen.

Keisei Electric Railway gained the most on the Nikkei 225, rising 6 percent to 765 yen after Nomura raised the stock price estimate for the railway operator 20 percent to 890 yen and maintained a buy rating.

Shipping lines declined the most among the Topix’s 33 industry groups after JPMorgan cut the sector’s rating to neutral from bullish, saying earnings momentum may deteriorate through September. The Baltic Dry Index (BDIY), a measure of shipping costs for commodities, fell for a 25th day yesterday, the longest losing streak since February.

Nippon Yusen slid 1.7 percent to 171 yen and rival Mitsui O.S.K. Lines Ltd. lost 2.2 percent to 218 yen. Kawasaki Kisen Kaisha Ltd, the third-biggest shipper, sank 2.7 percent to 110 yen.

-- With assistance from Masaaki Iwamoto in Tokyo. Editors: Jim Powell, Jason Clenfield

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

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

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