Nikkei 225 Climbs to Four-Year High on BOJ Nominee Bets

Japanese shares rose, with the Nikkei 225 Stock Average closing at its highest in nearly four and a half years, as the yen fell amid speculation Prime Minister Shinzo Abe’s likely nominee for the Bank of Japan (8301)’s governorship is supportive of more monetary stimulus.

Toyota Motor Corp. (7203), the world’s biggest carmaker, rose 1.4 percent. Kawasaki Kisen Kaisha Ltd., Japan’s third-largest shipping line, jumped 12 percent after industry leader A.P. Moeller-Maersk A/S said growth in global container demand will accelerate. Sharp Corp. led declines on the Nikkei 225 after two people familiar with the matter said talks with Taiwan’s Foxconn Technology Group to invest in the television maker will probably end without an agreement,

The Nikkei 225 increased 2.4 percent to 11,662.52 in Tokyo, closing at its highest since Sept. 29, 2008, after a government official with knowledge of the discussions said Abe is preparing to present Asian Development Bank President Haruhiko Kuroda as a candidate to replace BOJ Governor Masaaki Shirakawa. The Topix Index rose 1.8 percent to 980.70, with all but one of the gauge’s 33 industry groups advancing.

“Kuroda as chief would be the perfect line-up to implement more monetary stimulus measures as desired by the prime minister,” said Hideyuki Ishiguro, senior strategist at Okasan Securities Co. in Tokyo. “That’s going to be good for the market.”

The Topix surged 36 percent since Nov. 14, when elections were announced, amid optimism Abe and the central bank will lead the country out of deflation. The measure is trading at 1.15 times book value, compared with 2.1 for the Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index.

Kuroda as Chief

Kuroda, speaking in a Feb. 11 interview, said Japan’s central bank has “really substantial room” for further loosening and that additional measures could be justified this year. He also advocated an inflation target more than a decade before the BOJ adopted the policy in January.

Exporters rose as the yen dropped to its lowest in almost three years against the dollar. The Japanese currency has dropped almost 7 percent this year against a basket of currencies, the biggest decliner among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.

Toyota rose 1.4 percent to 4,795 yen. Honda Motor Co., which counts North America as its biggest market for sales, gained 1.6 percent to 3,525 yen. Sony Corp., which gets nearly 70 percent of its revenue outside of Japan, advanced 3.4 percent to 1,340 yen.

Stocks also rose on optimism Japan may join the Trans- Pacific Partnership trade agreement. Abe told reporters in Washington that he wanted to decide on whether to enter the talks as soon as possible after he met with U.S. President Barack Obama.

Trade Deal

Should Japan join the TPP agreement, the Nikkei 225 may rise to 14,500 by the end of this year as it may result in significant economic growth, Nomura Holdings Inc. said in a report today.

Shipping companies jumped, with the Marine Transport index gaining the most among the 33 industry Topix groups. Kawasaki Kisen surged 12 percent to 203 yen. Nippon Yusen K.K., Japan’s biggest shipping line, advanced 5.5 percent to 232 yen. Mitsui O.S.K. Lines Ltd., the No. 2, increased 4.6 percent to 322 yen.

Shipping Lines

A.P. Moeller-Maersk A/S, the world’s largest shipping company, forecast higher earnings this year as global container demand growth accelerates.

Among stocks that dropped, Sharp slumped 5.2 percent to 294 yen, declining the most on the Nikkei 225. The company’s talks with Foxconn Technology about investment in the Japanese company will probably end March 26 without an agreement, two people familiar with the discussions said.

The Nikkei Stock Average Volatility Index climbed 2 percent to 27.98, indicating traders expect a swing of about 8 percent of the benchmark gauge over the next 30 days. Volume on the measure was about 8.3 percent below its 30-day intraday average at the close.

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

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net

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