Japan Stocks Gain on Stimulus, Machine Orders
Japanese stocks climbed, with the Nikkei 225 Stock Average (NKY) reaching its highest in two weeks, on speculation policy makers in the U.S. and China will announce plans to stimulate the world’s largest economies and as machinery orders in Japan beat expectations.
Fanuc Corp. (6954), Japan’s biggest maker of industrial robots, gained 2.2 percent. Canon Inc., a camera maker that relies on the Americas for 27 percent of its revenue, advanced 2.6 percent. Mitsubishi Heavy Industries Ltd. gained 0.9 percent. Oki Electric Industry Ltd. slumped 11 percent to lead declines on the Nikkei 225 after saying accounting irregularities would cut profit more than previously expected.
The benchmark Nikkei 225 gained 1.7 percent to 8,959.96 at the close of trading in Tokyo. The broader Topix Index rose 1.3 percent to 741.82, with more than four stocks advancing for each that fell. Stocks rose ahead of a Federal Reserve policy meeting.
“We’re going to see something coming through from the Fed,” said Chris Weston, a Melbourne-based trader at IG Markets Ltd. “The signs that we got from China that they’ll meet their targets are also positive. The market’s being supported by central banks and there’s some juice left in these markets.”
The Topix dropped 15 percent from this year’s peak on March 27 through yesterday on concern Europe’s debt crisis is deepening and as growth slows 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.
Futures on the S&P’s 500 gained 0.2 percent today. The gauge rose 0.3 percent in New York yesterday before the Federal Open Market Committee starts a two-day meeting today to discuss additional measures to stimulate the U.S. economy. Chairman Ben S. Bernanke said on Aug. 31 he wouldn’t rule out steps to lower an unemployment rate he described as a “grave concern.”
Shares also rose on prospects for easing in China. The nation still has “ample strength” in either monetary or fiscal domains to propel economic growth, Wen said yesterday at the World Economic Forum in the city of Tianjin, adding the government has 100 billion yuan ($16 billion) in a fiscal stabilization fund.
“We will appropriately use that for preemptive policy and fine-tuning to propel stable economic growth,” Wen said, reiterating the country will continue to place more emphasis on ensuring stable growth.
Fanuc climbed 2.2 percent to 13,170 yen. Canon gained 2.6 percent to 2,640 yen.
Japan’s machinery orders rose more than estimated in July even as weakness in exports and waning subsidies for auto purchases threaten to stifle economic growth. Orders climbed 4.6 percent gaining 5.6 percent in June, the Cabinet Office said today in Tokyo. The median estimate of 29 economists surveyed by Bloomberg News was for a 2 percent increase.
Mitsubishi Heavy Industries Ltd. gained 1.3 percent to 324 yen.
Oki Electric slid 11 percent to 89 yen after the communications-equipment provider said improper accounting at its Spanish unit will cut profit by 30.8 billion yen ($395 million).
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