Topix Index Gains as Yen Falls on BOJ Official’s Remarks

Japanese stocks gained, led by carmakers as the yen slid after Bank of Japan board member Ryuzo Miyao said the bank’s policy of expanding the monetary base helps weaken the currency.

Mazda Motor Corp. (7261), which gets 73 percent of its sales abroad, rose 6.5 percent as the yen slid against all its major peers. Mitsubishi Motors Corp. surged 14 percent to lead gains on the Nikkei 225 Stock Average after losing about 25 percent in the previous four days. Tokyo Electric Power Co. fell 6 percent after Kyodo News said a parliamentary committee approved a bill allowing people affected by the Fukushima nuclear disaster to seek compensation beyond a three-year claims limit.

The Topix (TPX) added 1.2 percent to close at 1,168.27 in Tokyo after falling as much as 1.2 percent. Even after a 9.6 percent drop in the previous three days, Japan’s broadest equities gauge is still up 36 percent this year. The Nikkei 225 gained 1.2 percent to 14,311.98 today.

“The yen’s decline triggered a rebound from the sharp slide that started at the end of last week,” said Ichiro Yamada, helps manage about $3 billion in stocks at Fukoku Mutual Life Insurance Co. in Tokyo. “When you think about how much stocks slumped, the rebound has been a little anemic, but the market has stabilized somewhat.”

The Topix plunged 6.9 percent on May 23, the most since the aftermath of March 2011’s natural and nuclear disasters, and yesterday closed within half a percentage point from a correction, defined as a 10 percent drop from a recent high. The measure on May 22 closed at the highest level since Aug. 11, 2008, amid unprecedented BOJ bond buying.

BOJ Miyao

Japan’s economy has started picking up, BOJ board member Miyao said today in Tokyo. The central bank will monitor the bond market carefully after yields on benchmark 10-year notes touched 1 percent last week for the first time in a year.

The Nikkei Stock Average Volatility Index dropped 3.9 percent to 37.08, indicating traders expect a swing of about 11 percent on the benchmark gauge over the next 30 days.

Carmakers rose the most among the 33 Topix industry groups today as the yen slid against all of its 16 major counterparts. A weaker yen boosts the value of overseas earnings at Japanese exporters.

Mazda advanced 6.5 percent to 428 yen. Mitsubishi Motors surged 14 percent to 168 yen. Toyota Motor Corp., the world’s biggest carmaker, rose 4.9 percent to 6,210 yen.

Toyota Compensation

Toyota plans to pay 1.1 billion yen in compensation and 428 million yen in bonuses to directors as well as audit and supervisory board members, for the year ended March 2013, the company said in a notice sent to shareholders. The total is 28 percent higher than a year earlier.

U.S. markets reopen today after a holiday. The Conference Board’s index of consumer sentiment probably climbed this month to its highest level since November, while the S&P/Case-Shiller index of property values in 20 U.S. cities jumped the most since April 2006, data today is expected to show.

Tokyo Electric Power lost 6 percent to 612 yen after falling 7.3 percent yesterday. Kyodo said Japan’s upper house committee approved a bill to allow those affected by the Fukushima disaster to seek compensation payments even after the expiry of a three-year statutory period.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

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

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