Japan Stocks Rise as U.S. Housing Starts Climb, Yen Slips

Japanese stocks rose, with the Nikkei 225 Stock Average rebounding from the longest losing streak in three months, after U.S. housing starts beat estimates and the yen dropped, buoying the earnings outlook for exporters.

Mazda Motor Corp. (7261), the Japanese automaker with the highest proportion of exports, gained 5.9 percent. Toshiba Corp. paced gains among technology shares after bellwether Intel Corp. forecast sales that exceeded analysts’ estimates. Taiyo Yuden Co., a maker of smartphone parts, jumped 6.2 percent after Goldman Sachs Group Inc. recommended the shares. Olympus Corp. (7733), the world’s biggest maker of endoscopes, gained 2.3 percent after it formed a medical venture with Sony Corp.

The Nikkei 225 advanced 1.2 percent to close at 13,382.89 in Tokyo, rising for the first time in four days. The broader Topix (TPX) Index added 1.5 percent to 1,136.01, with about five stocks gaining for each that fell.

“U.S. housing starts are giving the market peace of mind after several disappointing economic reports,” said Kenji Shiomura, a Tokyo-based strategist at Daiwa Securities Group Inc., Japan’s second-largest brokerage. “Today’s advance is bigger than I expected. Investors who haven’t gotten into the rally are definitely looking to buy on dips.”

The Topix surged 57 percent from mid-November, gaining the most among major global indexes, amid confidence Prime Minister Shinzo Abe and BOJ Governor Haruhiko Kuroda will tackle deflation. The gauge traded at 17.2 times average estimated earnings, compared with 14.2 for the Standard & Poor’s 500 Index and 12.5 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

U.S. Housing

Futures on the S&P 500 Index (SPX) fell 0.2 percent. The measure climbed 1.4 percent yesterday, rebounding from its biggest drop since November, as new U.S. home construction rose more than forecast in March to the highest level since June 2008. Shares also advanced as earnings from Coca-Cola Co. to Johnson & Johnson topped estimates.

Intel, the world’s largest semiconductor maker, forecast second-quarter sales will be as much as $13.4 billion on strong demand for server chips. Analysts on average predicted sales of $12.8 billion, according to data compiled by Bloomberg.

Technology shares gained. Toshiba, which makes flash-memory chips, rose 5.5 percent to 561 yen. Advantest Corp. (6857), a maker of memory-chip testers, added 2 percent to 1,365 yen. Murata Manufacturing Co., a maker of capacitors for Apple Inc.’s iPhone, gained 3.8 percent to 8,150 yen.

Yen Slides

Japanese exporters advanced as the yen extended yesterday’s losses. In the last six-months, Japan’s currency has declined the most among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.

Mazda added 5.9 percent to 322 yen. The carmaker’s shares have tripled since mid-November, when the yen started its slide amid optimisim Abe would become the next prime minister.

Toyota Motor Corp. (7203), the world’s biggest carmaker by market value, rose 1.8 percent to 5,550 yen. Canon Inc. (7751), a camera maker that gets 79 percent of its revenue abroad, advanced 1.7 percent to 3,670 yen.

“Expectations for BOJ easing are still having an impact on the market, adding downward pressure to the yen,” said Ichiro Yamada, who helps oversee about 300 billion yen ($3.1 billion) in stocks as general manager at Fukoku Mutual Life Insurance in Tokyo. “Long-term investment money seems to be flowing into Japan as well as short-term money from hedge funds.”

Taiyo Yuden climbed 6.2 percent to 1,424 yen after its rating was raised from neutral to buy at Goldman, citing a weaker yen and strong demand for smartphone products.

Olympus, Sony

Olympus advanced 2.3 percent to 2,387 yen after announcing a medical venture with Sony to develop new medical imaging products. Even after a five-fold gain in the last 18 months, Olympus’s shares haven’t recouped losses from a 2011 accounting scandal. Sony gained 2.3 percent to 1,626 yen today.

Among stocks that fell, Nomura Holdings Inc. (8604) dropped 2.3 percent to 754 yen as prosecutors said they aim to seize 1.8 billion euros ($2.4 billion) of the brokerage’s assets as part of a probe into posssible fraud at an Italian bank. Banca Monte dei Paschi di Siena SpA has claimed Nomura colluded with former managers in devising a derivative used to hide losses.

The Nikkei Stock Average Volatility Index (VNKY) slid 8.5 percent to 25.76, indicating traders expect a swing of about 7.4 percent on the benchmark gauge over the next 30 days. Trading volume of the Nikkei 225 was about 8.5 percent above the 30-day average, according to data compiled by Bloomberg.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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