Japan Stocks Rebound on China After Nearing 3-Month Low

Japanese stocks rose, with the Nikkei 225 (NKY) Stock Average rebounding from near its lowest level since July, as China reported the slowest inflation rate in two years and better-than-estimated exports.

TDK Corp. (6762), a manufacturer of electronic parts which gets 27 percent of its revenue from China, climbed 3.3 percent. Bridgestone Corp. (5108) paced tire makers higher after rubber prices declined. Renesas Electronics Corp., the world’s largest micro- controller maker, jumped 14 percent after people familiar with the matter said it may be acquired. Softbank Corp. (9984) sank 5.3 percent as the mobile-phone company nears an agreement to buy 70 percent of Sprint Nextel Corp.

The Nikkei 225 climbed 0.5 percent to 8,577.93 at the 3 p.m. close in Tokyo, after dropping as much as 0.5 percent, with twice as many stocks rising as falling. Volume on the gauge was about equal with the 30-day average. The broader Topix (TPX) Index gained 0.7 percent to 722.99, with almost two rising for each that gained.

“Investors are relatively pleased with China’s export growth,” said Junichi Misawa, head of equity investment at Sumitomo Mitsui Trust Management Co. in Tokyo, which oversees about $44 billion. “Many Japanese companies related to China were sold too much on temporary political troubles.”

The Topix has declined 4.7 percent since Sept. 18, when protests in response to a territorial dispute escalated in mainland China, forcing Fast Retailing Co. and other Japanese retailers in China to shut their stores. The benchmark Nikkei 225 fell last week as the International Monetary Fund cut its forecast for global economic growth.

Relative Value

The price of shares on Japan’s broadest equity measure stood at 0.9 times book value, compared with 2.2 times for the Standard & Poor’s 500 Index and 1.5 times for the Europe Stoxx 600 Index. A number less than one means that companies can be bought for less than the value of their assets.

China’s exports and money supply grew more than estimated in September, signaling the world’s second-biggest economy may be stabilizing after a slowdown that began in the first quarter of 2011. Consumer prices rose 1.9 percent in September from a year earlier, close to the slowest pace in two years, and producer prices fell the most since 2009.

TDK gained 3.3 percent to 2,941 yen. Murata Manufacturing Co., an electronic-parts maker that depends on China and Taiwan for half of its sales, climbed 2.9 percent to 3,915 yen.

Japanese stocks declined earlier today amid concern global growth is slowing as a solution to Europe’s debt crisis eludes finance chiefs. European leaders meet this week as Greece seeks to justify renewed aid and Spain holds out on tapping a bailout.

Europe Drags

“While Europe still bears problems, the U.S. economy is solid and high growth in Asian countries is offsetting the market,” said Kiyoshi Ishigane, a Tokyo-based strategist at Mitsubishi UFJ Asset Management Co. which oversees about $70 billion. “The European situation continues to drag down the global economy. Even China’s improved trade data was negative toward the European Union area.”

Futures on the Standard & Poor’s 500 Index were little changed today. The gauge fell 0.3 percent on Oct. 12 even after confidence among U.S. consumers unexpectedly jumped in October to the highest level since before the recession began five years ago.

Bridgestone Corp. and other tiremakers gained the most among the Topix’s 33 industry groups after rubber prices for March delivery contract today fell by as much as 3.2 percent to the lowest level since Sept. 27. Bridgestone climbed 3.4 percent to 1,788 yen. Yokohama Rubber Ltd. gained 3 percent to 546 yen.

Renesas Electronics Corp. (6723) surged 14 percent to 302 yen after two people familiar with the matter said it may be acquired for 200 billion yen ($2.5 billion).

Softbank declined the most in the Nikkei 225, falling 5.3 percent to 2,268 yen after three people familiar with the matter said the company is near an agreement to buy a 70 percent stake in Sprint for $20 billion.

To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.