Japan’s Topix Index (TPX) capped the biggest two-day gain since March 2011 amid surging volume as the yen weakened on speculation elections next month will hand power to an opposition party pushing for more central-bank easing.
Exporters Canon Inc. (7751) and Honda Motor Co. gained more than 5 percent as the currency’s depreciation boosting the earnings outlook. Daiwa Securities Group Inc. jumped 7.1 percent to lead gains among brokerages. Ube Industries Ltd. sank 5.6 percent after Citigroup Inc. and Nomura Holdings Inc. cut their equity ratings on the chemicals maker.
The Topix rose 1.9 percent to close at 751.34 in Tokyo, with more than three shares advancing for each that fell. The gauge rose 4 percent in the last two days after elections were called for next month. For the week, the measure climbed 2.8 percent. The Nikkei 225 Stock Average (NKY) rose 2.2 percent to 9,024.16 on volume 62 percent above the 30-day average.
“There’s expectation the new party will increase stimulus heavily, making Japanese shares relatively more attractive,” said Seiichiro Iwamoto, who helps oversee about $33 billion at Mizuho Asset Management Co. in Tokyo. “Investors are changing to a risk-on mood.”
Prime Minister Yoshihiko Noda dissolved parliament today, triggering an election on Dec. 16 that polls suggest his Democratic Party of Japan will lose. Shinzo Abe, the leader of the main opposition Liberal Democratic Party, called yesterday for the central bank to pursue unlimited monetary stimulus to end deflation and revive an economy that shrank last quarter at the fastest pace since the 2011 earthquake.
Brokerages gained the most among the Topix’s 33 industry groups. Daiwa Securities jumped 7.1 percent to 348 yen. Nomura Holdings, Japan’s largest brokerage, advanced 5 percent to 316 yen.
Exporters gained after the yen depreciated to as low as 81.46 against the dollar last night in Tokyo, the weakest level since April 25. Against the euro, Japan’s currency weakened to 103.99 today from 103.13 at the close of stock trading yesterday. A weaker yen boosts overseas income at Japanese companies when repatriated.
Canon, the world’s biggest camera maker, jumped 5.8 percent to 2,697 yen. Honda Motor (7267), a carmaker that gets about 80 percent of its sales abroad, climbed 5.1 percent to 2,591 yen. Bridgestone Corp., the world’s largest maker of tires, rose 3.8 percent to 1,875 yen.
The Topix has fallen 19 percent since the DPJ took power on Sept. 16, 2009. The Standard & Poor’s 500 Index of U.S. shares advanced 27 percent in the same period
Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. The measure fell 0.2 percent yesterday as Wal-Mart Stores Inc. forecast earnings that missed estimates and lawmakers prepared for budget talks.
Ube Industries declined the most in the Nikkei 225, falling 5.6 percent to 170 yen after Citigroup cut the chemicals maker’s rating to neutral, saying a recovery in the market for materials used in nylon will take time. Nomura cut its rating to reduce from neutral.
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