Japan’s Topix Rises on Weaker Yen, U.S. Economic Optimism

Japan’s Topix index rose a third day, extending gains from a five-month high, as the yen held losses and U.S. data boosted confidence in the world’s largest economy.

Sony Corp., which gets about 72 percent of its sales outside Japan, added 0.9 percent. Bridgestone Corp. advanced 3.6 percent as Credit Suisse Group AG raised its target price on the tire manufacturer. Nippon Yusen K.K. led gains among shippers after a measure of commodity freight rates jumped the most in two months. Sumco Corp. (3436) slumped the most on the Nikkei 225 Stock Average after the silicon-wafer maker was downgraded at Nomura Holdings Inc.

The Topix climbed 0.4 percent to 1,280.78, its highest close since Jan. 23. The Nikkei 225 increased 0.3 percent to 15,369.97. The yen traded at 101.56 per dollar after dropping 0.2 percent yesterday.

“The global economy is starting to look brighter, with the U.S. leading the way,” said Hiroichi Nishi, an equities manager at SMBC Nikko Securities Inc. “Japan’s domestic economy is only gradually recovering. The country’s shares have been slow to gain ground compared to other markets and are still relatively cheap.”

Futures on the Standard & Poor’s 500 Index climbed less than 0.1 percent. The measure rose to a record yesterday, while the Dow Jones Industrial Average approached 17,000. The Institute for Supply Management’s U.S. factory index was at 55.3 in June, little changed from a five-month high of 55.4 in May. Readings above 50 indicate expansion.

China PMI

China’s official purchasing managers’ index for manufacturing came in at 51.0 for June, the strongest reading this year. The result matched the median estimate of economists surveyed by Bloomberg and marked an increase from 50.8 in May.

“The U.S. economy is steadily recovering, as are emerging countries, so there’s relief that it doesn’t look like there’s an economic slowdown,” said Seiichiro Iwamoto, who helps oversee the equivalent of $33 billion at Mizuho Asset Management Co. “We can expect earnings at companies that will benefit from increased capital investment to do well.”

Japanese businesses boosted investment plans more than forecast even after a sales-tax hike dented sentiment, the Bank of Japan’s Tankan report showed yesterday. Large companies across all industries plan to increase investment by 7.4 percent this fiscal year, compared with the 0.1 percent gain signaled in the previous survey.

Exporters Advance

Sony gained 0.9 percent to 1,721 yen. Sharp Corp., which gets about 60 percent of revenue abroad, rose 1.2 percent to 333 yen. Toyota Motor Corp., the world’s largest carmaker, climbed 0.7 percent to 6,209 yen.

Bridgestone gained 3.6 percent to 3,737 yen, capping its steepest daily advance since February. Credit Suisse raised its share-price outlook on the world’s second-biggest tiremaker to 4,650 yen from 4,600 yen and said it expects second-quarter operating profit to beat the company’s forecast.

Nippon Yusen, Japan’s biggest shipper, rallied 2 percent to 301 yen. Mitsui OSK Lines Ltd., the No. 2, rose 1.9 percent to 386 yen. Kawasaki Kisen Kaisha Ltd., the third-largest, climbed 0.9 percent to 215 yen.

The Baltic Dry index jumped 5.2 percent yesterday, the most since May 1.

Sumco dropped 3.9 percent to 929 yen. Nomura cut its rating on the stock to reduce from neutral. Analyst Shigeki Okazaki wrote in a report that wafer prices are not likely to rise in the near term as demand has peaked.

The Topix (TPX) has climbed 11 percent from a May 21 low, paring its drop for the year to 1.7 percent. The gauge traded at 1.3 times book value today, compared with 2.7 for the Standard & Poor’s 500 Index and 1.9 for the Stoxx Europe 600 Index yesterday.

(An earlier version of this story corrected the percentage of revenue Sharp gets from overseas.)

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 editors responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net Tom Redmond

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