Japan’s Topix Rises Eighth Day on U.S. Manufacturing Data

Japan’s Topix index rose for an eighth day, extending its longest winning streak in almost a year, after data showing growth in U.S. manufacturing boosted optimism about the world’s largest economy.

Renesas Electronics Corp. surged as much as 19 percent after a report Apple Inc. is seeking to buy a stake in a unit that designs chips for liquid-crystal displays used in smartphones. Mitsubishi Motors Corp. gained 4.8 percent after selling 70 percent more vehicles in the U.S. last month than in the same period a year earlier. Kyushu Electric Power Co. sank 5 percent after the Nikkei newspaper reported the utility is discussing a capital injection with the state-owned Development Bank of Japan Inc.

The Topix increased 0.6 percent to 1,211.36 at the close in Tokyo. Almost as many shares rose as fell on the 1,780-member gauge. The measure capped its first eight-day advance since a run that ended last April 12. The Nikkei 225 Stock Average added 1 percent to 14,946.32. The yen slid 0.1 percent to 103.79 per dollar, a fifth day of declines.

“The U.S. recovery is gathering pace,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “While there’s still some way to go in terms of economic indicators after the cold spell, investors have expectations for a recovery.”

U.S. Shares

Futures on the Standard & Poor’s 500 Index added 0.1 percent. The equity measure rose 0.7 percent to a record yesterday after the increase in the manufacturing gauge boosted optimism the economy withstood severe winter weather.

The Institute for Supply Management’s index climbed to 53.7 in March from 53.2 a month earlier, showing the industry was mending at the close of a winter-depressed first quarter, according to a report yesterday. The median forecast in a Bloomberg survey of economists was 54, with readings above 50 signaling growth.

“U.S. manufacturing data, the S&P 500 climbing to a record high yesterday, and the yen at the weakest since the end of January is boosting Japanese stocks,” said Stuart Beavis, head of institutional equity derivatives at Vantage Capital Markets in Hong Kong. “Japanese equities felt like they were oversold in the short term and too many people became bearish. The upward move today is good but it’s been a low conviction rally.”

The yen fell for a fifth day today, the longest stretch of declines since Dec. 27. Honda Motor Co., which gets about 80 percent of its revenue abroad, gained 1.2 percent to 3,662 yen. Canon Inc., the world’s biggest camera maker, added 1 percent to 3,202 yen. Mitsubishi Motors climbed 4.8 percent to 1,135 yen after saying its U.S. vehicle sales rose 70 percent to 8,996 units in March compared to the same month last year.

Renesas Surges

Renesas climbed 6 percent to 831 yen, paring an advance of as much as 19 percent. Apple is seeking to buy a stake in Renesas SP Drivers Inc. the Nikkei newspaper reported today. Renesas SP designs, develops and sells liquid crystal display drivers and controllers for small- and mid-size panels, according to the company’s website. No decision has yet been made, Renesas spokesman Taizo Endo said.

The Topix capped a 7.6 percent decline last quarter for the worst performance among developed markets tracked by Bloomberg. An appreciating yen and concern about yesterday’s sales-tax increase punished shares more than the rest of the world at a time when China’s slowdown, Russia’s annexation of Crimea and worry that the U.S. will raise interest rates sooner than anticipated made gains harder to come by.

Inflation Confidence

Japanese companies have signaled confidence in Prime Minister Shinzo Abe’s efforts to stamp out deflation. Consumer prices will rise 1.5 percent over the next 12 months, and 1.7 percent in three years, according to companies responding to the Bank of Japan’s Tankan survey.

Among stocks that fell, Kyushu Electric sank 5 percent to 1,151 yen. The Nikkei newspaper reported the utility is discussing a capital injection with the state-owned Development Bank of Japan Inc. One proposal calls for a $100 billion-yen ($963 million) preferred stock investment into the utility, which serves 8.5 million customers on the southernmost of Japan’s four main islands, according to the Nikkei.

The newspaper reported yesterday that Hokkaido Electric Power Co. is talking with the bank to raise funds of about 50 billion yen, which was later confirmed by both the company and the DBJ. Citigroup Inc. said was not enough considering continued earnings losses. Hokkaido Electric extended yesterday’s 10 percent plunge, falling 5.4 percent to 739 yen today.

To contact the reporters on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Yuko Takeo in Tokyo at ytakeo2@bloomberg.net

To contact the editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net Tom Redmond, Jim Powell

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