Japanese Stocks Advance as Yen Falls Before BOJ Meeting

Japanese stocks gained, with the Nikkei 225 (NKY) Stock Average rising to a month high, as the yen touched its lowest since June on expectations the Bank of Japan will add stimulus next week.

Nissan Motor Co., a carmaker that counts North America as its biggest market, climbed 1.9 percent. KDDI Corp. (9433) surged 5.5 percent after the mobile-phone provider offered as much as $2.7 billion to buy out Jupiter Telecommunications Co. Kansai Electric Power Co. led a rebound among utilities after saying it may restart nuclear power plants.

The Nikkei 225 rose 1.1 percent to 9,055.20 at 3 p.m. in Tokyo, the highest close since Sept. 25. Volume was about 8.1 percent below the 30-day average before a central bank policy meeting starting Oct. 30. The broader Topix (TPX) Index gained 1.1 percent to 751.42, with more than four shares rising for each that fell.

“The biggest catalyst boosting the market today is strong expectations the Bank of Japan will add stimulus,” said Ichiro Takamatsu, a Tokyo-based fund manager at Bayview Asset Management Co., which oversees 150 billion yen ($1.9 billion). “The BOJ is being pressured by massive stimulus from the Federal Reserve and the European Central Bank. If the BOJ is the only one that doesn’t act, the yen will surge.”

The Topix has risen 4.5 percent since Sept. 6 after the European Central Bank started a global wave of easing to boost growth, with the U.S. Federal Reserve and the Bank of Japan following suit. Shares on the stock gauge traded at 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.

U.S. Economy

Futures on the S&P 500 added 0.4 percent today. The gauge lost 0.3 percent yesterday in New York after the U.S. central bank said the economy is still growing modestly even as it buys $40 billion of mortgage-backed securities a month until the U.S. labor market recovers. Shares rose earlier on a report that new home sales climbed 5.7 percent to a 389,000 annual pace in September, the most since April 2010.

Japan’s government is asking the central bank to increase its asset-purchase program by 20 trillion yen, the Sankei newspaper reported on Oct. 23, citing an unnamed official. The Bank of Japan on Sept. 19 increased the program to 55 trillion yen from 45 trillion yen.

The yen depreciated to as low as 80.14 against the dollar today in Tokyo, the weakest since June 25, compared with 79.82 at the close of stock trading yesterday. Japan’s currency weakened to 104.15 against the euro from 103.60. A weaker yen boosts overseas income at Japanese companies when repatriated.

Nissan climbed 1.9 percent to 703 yen. Funai Electric Co., a maker of audio-visual equipment that relies on North America for half its revenue, jumped 2.3 percent to 1,129 yen.

KDDI Jumps

KDDI, Japan’s second-biggest mobile-phone company, jumped 5.5 percent to 6,370 yen after offering as much as 216 billion yen ($2.7 billion) with Sumitomo Corp. to buy out Jupiter Telecommunications and create a cable TV provider with more than half the country’s subscribers.

The Topix utilities gauge, which plunged 11 percent the past three days, rebounded after Kansai Electric said it was weighing restarting nuclear reactors to secure a stable power supply. A report from a government panel yesterday showed that fuel costs for power utilities may double from two years ago because most of the nation’s nuclear reactors remain shut after the Fukushima meltdown.

Kansai Electric rallied 5.5 percent to 614 yen. Tohoku Electric Power Co. climbed 3.7 percent to 590 yen.

The Nikkei Stock Average Volatility Index (VNKY) added 0.1 percent to 19.56, indicating that traders expect a swing of 5.6 percent on the equity benchmark in the next 30 days.

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

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