Topix Heads to Four-Month High as Yen Weakens Past 82

Japanese stocks rose, with the Topix (TPX) Index closing at its highest level in more than four months, as the yen weakened past 82 to the dollar for the first time since April, boosting earnings outlook for exporters.

Canon Inc. (7751), the world’s biggest camera maker, gained 3.3 percent. Toyota Motor Corp. (7203) added 2.3 percent after the carmaker said China retail sales returned close to levels recorded before a wave of anti-Japan protests. Nippon Yusen K.K., Japan’s top shipping line by sales, rose 3.6 percent after a gauge of cargo rates recorded its longest winning streak since July. NTN Corp. (6472) soared 15 percent after Credit Suisse Group AG said the bearing maker will benefit from recovery in China.

The Topix rose 1.2 percent to 776.43, its highest since July 4, at the 3 p.m. close in Tokyo. More than three stocks advanced for each that fell. The gauge gained 3.3 percent on the week, extending a rally that started after the ruling party called for elections last week. Japan’s markets are closed tomorrow for a holiday.

“Today’s market is simply focusing on the currency,” said Naoki Fujiwara, a chief fund manager at Shinkin Asset Management Co., which oversees about $6.3 billion. “The yen’s weakening against both the dollar and euro is encouraging buying of cyclical shares such as shipping, cars and other exporters. Volume is swelling as foreign investors buy on expectations a new government may step up stimulus measures.”

The Nikkei 225 Stock Average (NKY) climbed 1.6 percent to 9,366.80 today, with volume more than 15 percent greater than the 30-day average.

Election Rally

The Topix has risen 7.5 percent since Nov. 14, when Prime Minister Yoshihiko Noda called for elections that polls show the opposition party Liberal Democratic Party is likely to win. Automakers and steelmakers are among industries leading gains as the gauge approaches its strongest six-day advance since March 2011, amid speculation the LDP will push for a looser monetary policy.

Japan’s broadest measure of share performance trades at 0.9 times book value, compared with 2.1 for the Standard & Poor’s 500 Index and 1.5 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.

The yen reached 82.59 against the dollar in Tokyo, the weakest level since April 4. The Japanese currency also weakened as far as 106.26 yen against the euro, its lowest since May 2.

Canon rose 3.3 percent to 2,912 yen. Honda Motor Co. (7267), a carmaker that relies on North America as its biggest market, climbed 3.5 percent to 2,750 yen.

Toyota Surges

Toyota gained 2.3 percent to 3,515 yen. The automaker’s operating profit declines by about 35 billion yen for every one yen gained against the dollar, and by about 5 billion yen for every one yen against the euro, said Joichi Tachikawa, a company spokesman.

Toyota also got a boost after saying it expects demand for Japanese cars in China to return to levels before protests erupted in September over a territorial dispute.

Shipping lines gained after the Baltic Dry Index (BDIY), a measure of the cost of transporting commodities, added 0.7 percent yesterday, rising for a nine straight day.

Nippon Yusen advanced 3.6 percent to 173 yen. Mitsui O.S.K. Lines Ltd., the nation’s second-biggest shipping line by revenue, climbed 2.4 percent to 211 yen.

Futures on the S&P 500 Index added 0.2 percent today. The measure rose 0.2 percent yesterday in New York, as U.S. Secretary of State Hillary Clinton and Egyptian Foreign Minister Mohamed Amr brokered a cease-fire between Israel and Hamas.

Jobless claims fell by 41,000 to 410,000 in the week ended Nov. 17, the Labor Department said yesterday. The number of applications matched the median forecast of 48 economists surveyed by Bloomberg.

China Manufacturing

NTN gained the most in the Nikkei 225, rising 15 percent to 172 yen after Credit Suisse said the company may benefit from a recovery in China as the government spending boosts demand for bearings by railway companies.

Exporters to China gained as data showed manufacturing in that nation may expand in November for the first time in 13 months. The preliminary reading was 50.4 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics. That compares with a final level of 49.5 for October. A reading above 50 indicates expansion.

Murata Manufacturing Co., an electronic-parts maker that depends China and Taiwan for 50 percent of its sales, climbed 2.5 percent to 4,600 yen in Osaka. TDK Corp. (6762), an electronic parts maker that gets more than 25 percent of its revenue in China, rose 2.1 percent 3,180 yen.

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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