Topix Heading for Longest Weekly Win Streak in 40 Years

Japanese stocks gained, with the Topix (TPX) Index posting its longest weekly winning streak since 1973, as the yen weakened after falling consumer prices added to the case for further easing and U.S jobless claims fell.

Toyota (7203) Motor Corp. advanced 2.2 percent after a steel supplier gave the world’s biggest carmaker a discount. Sony Corp. surged 8.5 percent on a report it may sell its lithium battery operations. Dainippon Sumitomo Pharma Co. (4506) has surged 29 percent over two days on yesterday’s NHK report it will apply for clinical trials for a potentially revolutionary cancer drug. Nidec Corp. dropped 1.7 percent after the manufacturer of precision motors cut its full-year profit forecast.

The Topix rose 2.2 percent to 917.09 at the close of trading in Tokyo, its highest level since before the March 2011 earthquake, with all its 33 industry groups gaining. The measure climbed 0.6 percent this week to cap an 11-week advance, its longest such winning streak since January 1973. The Nikkei 225 (NKY) Stock Average gained 2.9 percent to 10,926.65.

“Investors are becoming more optimistic about the earnings prospects for Japanese exporters with the yen weakening so much,” said Masaru Hamasaki, chief strategist at Toyota Asset Management Co., which oversees about $20 billion. “Good economic data out of the U.S., as well as the hope placed in policy makers’ monetary easing measures,” are boosting shares.

The Topix has risen 27 percent since elections were announced on Nov. 14 on optimism Prime Minister Shinzo Abe’s new government will take steps to fight deflation. The gauge is trading at 1.08 times book value, compared with 2.06 for the Standard & Poor’s 500 Index and 1.49 for the Stoxx Europe 600 Index.

Consumer Prices

Japan’s consumer prices declined for the sixth time in seven months in December, adding impetus for the Bank of Japan to reach an inflation goal announced this week. Consumer prices excluding fresh food fell 0.2 percent, the statistics bureau said in Tokyo today, matching the estimate of economists surveyed by Bloomberg News.

“The 2 percent inflation target set by the Bank of Japan is exceedingly high, and with the CPI down 0.2 percent, there’s strong expectation for further monetary easing steps,” said Tamiji Shinada, executive director of investment research at Nomura Securities Co. in Tokyo.

Exporters gained as the yen weakened against the dollar, poised for a record 11-week stretch of losses. Nissan Motor Co., a carmaker that counts North America as its biggest market, rose 2.6 percent to 874 yen. Panasonic Corp. (6752), the producer of Viera televisions, increased 2.7 percent to 604 yen.

Toyota Climbs

Toyota, which gets a quarter of its sales from North America, gained 2.2 percent to 4,340 yen. The shares also rose after Nippon Steel & Sumitomo Metal Corp. agreed to cut steel sheet prices by 4 percent for the automaker, the Nikkei newspaper reported today, without citing anyone. Nippon Steel gained 2.2 percent to 233 yen.

Sony advanced 8.5 percent to 1,290 yen, its highest close since April. The company may sell its lithium battery unit to a venture between NEC Corp. and Nissan, the Yomiuri newspaper reported, citing unidentified people. Sony (6758) said it wasn’t the source of the report.

Dainippon Sumitomo gained 12 percent to 1,416 yen, the biggest gain on the Nikkei 225 and extending yesterday’s 16 percent jump. The company may apply for clinical trials in Japan for the world’s first drug to target cancer stem cells, national broadcaster NHK reported yesterday. Shares pared gains after a Jefferies Group Inc. analyst said investors were “overly excited” because the NHK report had no new content.

Futures on the S&P 500 slid 0.2 percent today. Most U.S. stocks rose yesterday as an unexpected drop in jobless claims and better-than-forecast earnings from Netflix Inc. and Xerox Corp. offset the Apple Inc.’s worst slump in four years.

Nidec Cuts Forecast

Among stocks that fell, Nidec slumped 1.7 percent in Osaka. The motor maker yesterday cut its full-year net-income forecast by 91 percent to 4.5 billion yen, citing lower demand and restructuring costs. The stock was the biggest drag on the Topix.

The Nikkei Stock Average Volatility Index (VNKY) rose 4 percent to 22.19, indicating traders expect a swing of about 6.4 percent on the benchmark gauge over the next 30 days.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

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

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