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Most Japanese Stocks Gain on Global Stimulus Speculation

Most Japanese stocks gained as reports from the U.S., China and Japan signaled global economic growth is slowing, adding pressure for policy makers to do more to support expansion.

Komatsu Ltd., the world’s second-biggest construction equipment maker that generates revenue in Japan, the U.S. and China, rose 3.2 percent. Tokyo Electron Ltd. and Nikon Corp., suppliers to Intel Corp. (INTC), lost more than 2.9 percent after the world’s No. 1 semiconductor maker cut its sales forecast. Toho Holdings Ltd. surged 12 percent as the manufacturer of medical tools said it will spend 5 billion yen ($64 million) buying back its shares.

The Topix (TPX) Index gained 0.3 percent to 737.34 at the close of trading in Tokyo, with almost twice as many shares climbing as falling. The Nikkei 225 (NKY) Stock Average fell less than 0.1 percent to 8,869.37. A report today showing Japan’s economy expanded in the second quarter at half the pace the government initially estimated, adds to signs of a global slowdown after a data yesterday showed China’s industrial production dropped and the U.S. last week reported weaker-than-estimated payrolls.

“Following the weak U.S. jobs report, the backdrop is ideal to act this week and deliver more quantitative easing,” said George Boubouras, Melbourne-based head of investment strategy at UBS AG’s Australian wealth management unit. The Swiss bank has about $1.5 trillion in assets under management. “This week is looking like the last window for the Fed to act,” before the U.S. election.

Japan’s gross domestic product grew an annualized 0.7 percent in the three months through June, the Cabinet Office said in Tokyo today, less than a preliminary calculation of 1.4 percent. The median forecast of 26 economists surveyed by Bloomberg News was for a revised 1 percent gain.

Current Account

The nation’s current-account surplus narrowed 41 percent from a year earlier to 625.4 billion yen in July, a finance ministry report showed.

Chinese industrial output increased 8.9 percent in August from a year earlier, the National Bureau of Statistics said yesterday in Beijing. The data underscore risks that full-year growth in the world’s second-biggest economy will slow to its weakest pace in more than two decades and undermine support for the ruling Communist Party during its once-a-decade power transition to a new generation of leaders later this year.

Employers in the U.S. last month added fewer jobs than economists forecast, adding pressure on the Federal Reserve to act to spur growth when policy makers meet Sept. 12-13.

The Topix dropped 16 percent from this year’s peak on March 27 on concern Europe’s debt crisis is deepening and growth is slowing in China and the U.S. The gauge trades at 0.9 times book value, compared with 2.2 for the Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index. A number below one means companies can be bought for less than the value of their assets.

To contact the reporter on this story: Adam Haigh in Sydney at ahaigh1@bloomberg.net

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

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