Japanese Shares Rise Ahead of Fed as Exporters Advance

Japanese shares rose, with the Topix index gaining the most in more than a week, boosted by exporters as the yen weakened before a Federal Reserve decision today on whether to cut stimulus.

Honda Motor Co., which gets about 80 percent of revenue abroad, added 3.1 percent. Casio Computer Co. (6952), a maker of consumer electronics and watches, jumped 5.7 percent after Morgan Stanley MUFG Securities Co. raised its rating on the stock. Ricoh Co. slumped 4.7 percent as Credit Suisse Group AG said the maker of printers and cameras will struggle to reach its third-quarter operating-profit target.

The Topix climbed 1.5 percent to 1,250.49 at the close in Tokyo, its highest since Dec. 10. All but one of the 33 industry groups advanced. The Nikkei 225 Stock Average increased 2 percent to 15,587.80. The yen slid 0.3 percent to trade at 103 per dollar after gaining for three days.

“It’s difficult to read how the market will react to Fed tapering,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s No. 2 lender by market value. “Investor sentiment right now is to wait and see the results of the Fed meeting. If the Fed decides to taper, the flip-side is it means the U.S. economy is stronger.”

About 34 percent of economists surveyed by Bloomberg Dec. 6 predicted the Fed will start paring its $85 billion-a-month bond-buying program at this meeting. There’s about a 60 percent chance the central bank will announce a reduction in asset purchases today, according to Mohamed El-Erian, chief executive officer of Pacific Investment Management Co.

Data today showed Japan’s biggest November trade deficit on record as imports climbed 21.1 percent from a year earlier, supported by demand ahead of a sales-tax increase in April. Exports increased 18.4 percent, as shipments to China bounced back, the Ministry of Finance said in Tokyo.

Yen Retreats

The yen declined for the first time in four days. Automakers and consumer-electronics producers were among the biggest boosts to the Topix. (TPX)

Honda gained 3.1 percent to 4,215 yen. Toyota Motor Corp., the world’s largest carmaker, added 1.6 percent to 6,200 yen. Canon Inc. (7751), the No. 1 camera maker, rose 1.5 percent to 3,315 yen.

Casio Computer climbed 5.7 percent to 1,235 yen, its highest level since August 2008. Morgan Stanley MUFG raised the stock to overweight. Rival watchmaker Citizen Holdings Co. jumped 7.7 percent to 850 yen for the biggest gain on the Nikkei 225 after the brokerage also boosted its shares.

Among stocks that declined, Ricoh tumbled 4.7 percent to 1,070 yen, the most on the Nikkei 225. The company will struggle to reach its third-quarter operating-profit forecast as the contribution from the launch of its new multifunctional color printers was weak initially, Credit Suisse analyst Yu Yoshida wrote in a report.

Lending Facility

The Bank of Japan is likely to expand a low-interest lending facility for industries, with a decision possible as soon as next month, people familiar with the central bank’s discussions said.

The program established by previous Governor Masaaki Shirakawa in 2010 may be boosted by about 1 trillion yen ($9.7 billion) from the current 5.5 trillion yen, according to the people, who asked not be named because the discussions were private. The facility may be extended by at least one year from its planned expiry in March, the people said.

The Topix rose 45 percent this year, the most among 24 major developed markets tracked by Bloomberg, as Prime Minister Shinzo Abe and the BOJ took steps to end 15 years of deflation. The Topix traded at 1.27 times book value today, compared with multiples of 2.57 for the S&P 500 and 1.73 for the Stoxx Europe 600 Index yesterday.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

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

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