Japan Shares Close Up After Dipping as BOJ Held Policy

Japanese shares rose, after earlier sliding as the Bank of Japan kept monetary policy unchanged, as utilities and consumer lenders advanced and Okuma (6103) Corp. jumped.

Okuma climbed the most on the Nikkei 225 Stock Average after Mizuho Financial Group Inc. raised its rating on the manufacturer of machine tools. The Topix Electric Power and Gas Index rose 1.5 percent and a gauge tracking consumer lenders gained 1.1 percent. Dainippon Screen Manufacturing Co. lost 2.7 percent after JPMorgan Chase & Co. cut its outlook on the producer of machines to clean semiconductor wafers.

The Topix climbed 0.3 percent to 1,299.63 at the close of trading in Tokyo, after falling as much as 0.7 percent as the BOJ refrained from boosting unprecedented easing. The Nikkei 225 rose 0.2 percent to 15,820.96. The yen fell 0.1 percent to 104.45 per dollar. The International Monetary Fund raised its forecast for global growth this year and boosted Japan’s growth outlook from a 1.2 percent advance to 1.7 percent.

“The IMF see the negative effects on the economy from raising the sales tax as not being that big,” said Masanaga Kono, a senior strategist at Amundi Japan Ltd. “The BOJ see no changes to the economy, so they’re taking the stance that they don’t need to increase easing. But they can still play the monetary easing card if stocks plunge or the yen strengthens.”

Governor Haruhiko Kuroda’s board stuck to its pledge to expand the monetary base by an annual 60 trillion to 70 trillion yen today after a two-day meeting in Tokyo, in line with the forecasts of all 36 economists surveyed by Bloomberg News.

Accelerating inflation is prompting analysts from HSBC Holdings Plc to Daiwa Securities Co. to push back forecasts for when the BOJ may add to stimulus.

Extra Stimulus

The percentage of economists predicting an expansion of the program between April and June fell to 33 percent from 56 percent three months ago in a Bloomberg News survey of 36 economists conducted Jan. 10-15.

Futures on the Standard and Poor’s 500 Index climbed 0.1 percent today. Most U.S. stocks rose yesterday as optimism about global economic growth offset disappointing results from Johnson & Johnson and Verizon Communications Inc.

The International Monetary Fund raised its forecasts for worldwide growth this year as expansions in the U.S. and U.K. accelerate, and urged advanced economies to maintain monetary accommodation to strengthen the recovery.

Global Economy

The global economy will expand 3.7 percent this year, compared with an October estimate of 3.6 percent, the IMF said in revisions to its World Economic Outlook released in Washington.

“In Japan, growth is now expected to slow more gradually compared with October 2013 WEO projections. Temporary fiscal stimulus should partly offset the drag from the consumption tax increase in early 2014,” the IMF said.

The Topix (TPX) jumped 51 percent in 2013, its third-biggest yearly gain on record, as Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda took steps to end 15 years of deflation. Strategists surveyed by Bloomberg expect the gauge will climb to 1,470 by the end of 2014 as the yen weakens amid prospects for further stimulus by the BOJ while the Federal Reserve cuts back.

Okuma jumped 6.5 percent to 1,134 yen, its biggest advance since August. Mizuho raised its rating on the stock to buy from underperform on the outlook a weaker yen will boost earnings.

The Topix Electric Power and Gas Index jumped 1.5 percent, while the Other Financing Business Index rose 1.1 percent.

The Topix Other Products Index rose 1.9 percent, the most among the Topix industry groups. Video-game console maker Nintendo Co. gained 4.6 percent to 14,025 yen.

Dainippon Screen fell 2.7 percent to 546 yen, the biggest drop on the Nikkei 225. (NKY) JPMorgan cut its outlook on the shares to neutral from overweight.

The Topix traded at 1.32 times book value today, compared with 2.66 for the S&P 500 yesterday. Volume on the Topix was 1.5 percent above the 30-day average today.

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: Sarah McDonald at smcdonald23@bloomberg.net

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