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Japan Shares Rise Fourth Day on U.S. Debt Negotiations

Japanese shares rose, with the Topix (TPX) index capping its longest winning streak in a month, as U.S. lawmakers said they will continue talks on raising the nation’s debt limit to avoid a default.

Panasonic Corp., a consumer-electronics company that gets 14 percent of its sales from the Americas, added 2.8 percent. Orix Corp. jumped 3.8 percent as consumer lenders gained the most among the Topix’s 33 industry groups. Nikon Corp. climbed 4.2 percent after Nomura Holdings Inc. raised its rating on the camera maker. Fast Retailing Co. (9983), Asia’s largest clothing retailer, sunk 3.2 percent to lead declines on the Nikkei 225 Stock Average after its profit forecast missed estimates.

The Topix climbed 1.6 percent to 1,197.17 at the close in Tokyo, with all the gauge’s sectors advancing. The measure rose 2.9 percent this week after two weeks of declines. The Nikkei 225 added 1.5 percent to 14,404.74.

“The likelihood of a short-term debt ceiling increase is looking very strong and the U.S. is unlikely to default, so there’s some sense of security,” said Osamu Koizumi, a Tokyo-based executive officer at Meiji Yasuda Asset Management Co., which oversees the equivalent of $18 billion in assets. “But there’s still a long way to go. The yen is weakening on that now, so for the stock market, which is so sensitive to the currency, that’s good news.”

Futures on the Standard & Poor’s 500 Index were little changed today. The U.S. equity gauge jumped 2.2 percent yesterday, the biggest rally since January, as House Speaker John Boehner and other party leaders went to the White House to negotiate.

Debt Negotiations

President Barack Obama did not accept or reject House Republicans’ proposal for a short-term increase in the debt ceiling that would reduce prospects for a default. The plan would push the lapse of U.S. borrowing authority to Nov. 22 from Oct. 17. It wouldn’t end the partial shutdown of the federal government, which is going into its eleventh day.

“We’re going to be continually flung around by developments from the U.S.,” said Juichi Wako, a Tokyo-based equity strategist at Nomura Securities Co., the nation’s biggest brokerage. “But given it looks like they took a step forward, extreme risk aversion is retreating.”

The yen fell 0.2 percent against the dollar to 98.40, from as strong as 97.34 yesterday. Against the euro, the Japanese currency fell 0.4 percent to 133.17. A weaker yen boosts overseas earnings for exporters when repatriated.

Exporters Advance

Panasonic, which gets almost half its revenue abroad, gained 2.8 percent to 955 yen. Nintendo Co. (7974), which relies on the Americas for most its sales, added 1.5 percent to 11,420 yen. Toyota Motor Corp., Asia’s biggest carmaker, rose 0.9 percent to 6,410 yen.

The Topix Other Financing Business Index gained 3.2 percent for the biggest increase among Topix groups, followed by paper makers and steel producers. Orix, which issues rental, real estate and consumer loans, gained 3.8 percent to 1,611 yen.

Earnings per share for companies on the Topix will rise 35 percent in the next 12 months, according to analyst estimates compiled by Bloomberg.

“We’re about to head full-swing into earnings season and expectations are for companies to raise earnings one-after-another,” Nomura’s Wako said. “The condition of earnings is improving.”

Matsuya Co. jumped 5.7 percent to 1,277 yen after the department-store operator raised its profit forecast 43 percent to 1 billion yen ($10.1 million). Nippon Express Co. added 3.5 percent to 497 yen on a Nikkei newspaper report that the freight transporter’s first-half operating profit rose 10 percent to 17 billion yen as domestic demand recovered.

Broccoli Co., a publisher of manga and video games, surged 27 percent to 381 yen after half-year net income jumped 157 percent.

Fast Retailing

Among stocks that fell, Fast Retailing dropped 3.2 percent to 33,450 yen. The maker of Uniqlo casual apparel expects net income of 92 billion yen for the year ending August 2014, compared with a 99.3 billion yen estimate from analysts surveyed by Bloomberg. The retailer said discounts were hurting domestic earnings.

The Topix traded at 1.25 times book value today, compared with 2.49 for the S&P 500 and 1.74 for the Stoxx Europe 600 Index. The Japanese gauge’s 30-day historic volatility was at 18.32 today, compared with its five-year median of 19.31.

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

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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