Japanese shares rose, with the Nikkei 225 Stock Average (NKY) recording its highest close in 4 1/2 years, after the yen weakened to its lowest level since June 2009, boosting the earnings outlook for exporters.
Honda Motor Co., which gets about 80 percent of its sales outside of Japan, gained 3.7 percent as just four stocks fell on the benchmark gauge. Tokyo Tatemono Co. jumped 16 percent, the most on the Nikkei 225, after Credit Suisse AG named the property developer among its top picks. Shinsei Bank Ltd. led a gain by lenders. Takashimaya Co., Japan’s third-biggest department-store operator by market value, advanced 9.7 percent after the Nikkei newspaper said its operating profit rose.
The Nikkei 225 gained 2.8 percent to 13,192.59 at the close of trading in Tokyo, its highest close since Aug. 12, 2008. Volume on the measure was 39 percent higher than its 30-day average as 218 companies advanced, the most since Jan. 4. The Topix Index (TPX) rose 3.3 percent to 1,101.74, with about 12 shares rising for each that fell.
“There are many more benefits to companies than there are negatives if the yen trades at around 100 yen to the dollar,” said Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co., which oversees about $38 billion. “Exporters that are globally competitive, such as car, tire and machinery manufacturers, will benefit the most. The market hasn’t fully priced in the positive earnings outlook for the fiscal year ending March 2014.”
All of the 33 industry groups on the Topix rose today, led by consumer-finance companies and brokerages. Banks and exporters such as carmakers and consumer electronic manufacturers provided the biggest boost to the Topix. The gauge is trading at 1.2 times book value, compared with 2.2 for the Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Honda, Japan’s second-biggest automaker by market value, gained 3.7 percent to 3,805 yen. Nomura Holdings Inc. (8604), Japan’s biggest brokerage, jumped 10 percent to 663 yen, taking its advance since November to 133 percent. Mitsui Fudosan Co., Japan’s largest property developer by sales, advanced 6 percent to 3,510 yen, its highest level since July 2007.
The Topix jumped 48 percent from mid-November through April 5 as Prime Minister Shinzo Abe and central bank Governor Haruhiko Kuroda pledged to defeat 15 years of deflation.
The yen touched 98.85 per dollar, its lowest level since June 2009, amid concern Bank of Japan measures to fight deflation, announced last week, will debase the currency.
BOJ officials said on April 4 the central bank will increase its monthly bond purchases to 7.5 trillion yen ($76 billion), exceeding the 5.2 trillion yen forecast by economists surveyed by Bloomberg. They also suspended a cap on some bond holdings and dropped a limit on debt maturities, while also setting a two-year horizon for their goal of 2 percent inflation.
Among other stocks that rose, Tokyo Tatemono surged 16 percent to 994 yen, its highest level since January 2008. The Bank of Japan’s quantitative easing measures mean that “now may be the time to just swing for the fences in real estate investment given the prospect of an easy home run,” wrote Credit Suisse analyst Masahiro Mochizuki in a report today. He named Tokyo Tatemono among his top picks for real estate stocks on a likely improvement in quality for its property holdings.
Takashimaya jumped 9.7 percent to 1,099 yen, the most since 2007. The department store operator, up 22 percent through the last five trading days, may report a 20 percent increase in operating profit to 25.5 billion yen, the Nikkei reported.
The Nikkei Stock Average Volatility Index (VNKY) rose 4 percent to 29.79 today, indicating traders expect a swing of about 8.5 percent on the benchmark gauge over the next 30 days.
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