Topix Extends 4 1/2 Year High as Shippers, Utilities Rise

Japanese shares gained for a second day, with the Topix Index (TPX) extending a 4 1/2-year high, as utilities climbed on optimism nuclear power plants may be restarted and Nippon Yusen KK and Osaka Gas (9532) Co. advanced on prospects for U.S. shale gas imports.

Osaka Gas added 4.2 percent after the U.S. conditionally approved exports of liquefied natural gas from a plant partly owned by the company. Nippon Yusen, the world’s largest publicly traded operator of ships that carry the fuel, surged 11 percent after a record gain in cargo rates. Tokyo Electric Power Co. (9501) jumped 16 percent after the Yomiuri newspaper reported it and other utilities will apply to restart reactors. Tepco said nothing has been decided.

“Even though the company is denying the report, investors are increasingly optimistic that nuclear power plants will restart,” said Yoshihiro Okumura, a general manager at Chiba-Gin Asset Management Co. in Tokyo. “The U.S. LNG export story is also a positive.”

The Topix advanced 1.3 percent to close at 1,269.51 in Tokyo, the highest since Aug. 12, 2008. More than two shares gained for each that fell. The Nikkei 225 Stock Average (NKY) rose 1.5 percent to 15,360.81, with volume about 21 percent higher than the 30-day average.

The Topix has risen 48 percent this year, outperforming all major equity indexes amid unprecedented easing from the Bank of Japan. The gauge traded at 1.3 times book value, compared with about 2.5 for the Standard & Poor’s 500 Index and 1.7 for the Stoxx Europe 600 Index.

Toyota, Sony

Exporters gained as an index of U.S. leading indicators climbed in April and consumer confidence rose to the highest level in almost six years. Toyota Motor Corp., which counts North America as its largest market, advanced 1.9 percent to 6,590 yen. Sony Corp. jumped 5.7 percent 2,162 yen.

Japanese stocks also rose today after Prime Minister Shinzo Abe last week vowed to increase private investment to the level before the 2008 financial crisis and triple infrastructure exports as part of his strategy to overcome deflation.

Shipping companies and utilities led gains among the Topix’s 33 industry groups.

Osaka Gas jumped 4.2 percent to 477 yen, its highest close since December 2007, after the U.S. Energy Department conditionally approved exports from the Freeport LNG project to countries that don’t have free-trade agreements with the U.S.

The development, partly owned by ConocoPhillips, Dow Chemical Co. and Osaka Gas, must still win approval from the Federal Energy Regulatory Commission.

Shale Gas

Shippers gained after LNG cargo rates jumped 28 percent last week, the largest weekly gain on record as surging U.S. exports of the cooking fuel and chemicals feedstock strains vessel supply. Mitsui O.S.K. Lines Ltd. and Kawasaki Kisen Kaisha Ltd., Japan’s second- and third-biggest shipping lines, increased 7.6 percent and 6 percent.

Nippon Yusen (9101), the No. 1, surged 11 percent to 295 yen, its biggest gain since Oct. 2008. The shipping company last week agreed to take a one-third stake in a U.S. LNG export facility with trading companies Mitsui & Co. and Mitsubishi Corp.

Mitsui & Co. advanced 4 percent to 1,472 yen, while Mitsubishi gained 1.7 percent to 1,925 yen.

Tokyo Electric led utilities higher after the Yomiuri newspaper reported yesterday that Tepco and four other power producers will file to restart nuclear plants in July. Separately, Japan’s economy minister Akira Amari said on public broadcaster NHK yesterday that restarting reactors was a possible way to lower the cost of rising fuel imports amid the yen’s weakness.

Reactor Restarts

Tepco, operator of the wrecked Fukushima Dai-Ichi nuclear nuclear plant, surged 16 percent to 726 yen, extending its advance since the start of December to more than 400 percent. Kansai Electric Power Co. jumped 7.5 percent to 1,447 yen.

The Topix Electric Power & Gas Index jumped 5.9 percent to its highest level since March 25, 2011. The gauge has risen 44 percent so far this quarter, the second-biggest gain among industry groups after securities firms, which have advanced 58 percent.

Builders of nuclear power plants and suppliers of reactor parts jumped today after the Nikkei newspaper reported Japan and India will resume atomic energy talks that collapsed after the Fukushima disaster.

Japan Steel Works Ltd., which forges reactor containment vessels, surged 16 percent to 723 yen. Toshiba Corp., a builder of power plants, rose 4.6 percent to 545 yen.

Sharp Corp. rose 17 percent to 552 yen to lead gains on the Nikkei 225. The display maker extended its advance for the year to 82 percent.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net

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

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