Japan Shares Rise After Yen Drops on U.S. Payrolls Data

Japanese stocks rose, with the Topix index (TPX) extending its weekly gain, after the yen slid yesterday after U.S. unemployment fell to an almost six-year low.

Honda Motor Co. (7267), which gets about 80 percent of revenue from abroad, added 1 percent. Seven & I Holdings Co., Japan’s biggest retailer by market value, climbed 2 percent as it maintained forecasts after first-quarter profit rose. Panasonic Corp. advanced 0.9 percent after saying it’s in talks with Tesla Motors Inc. to invest in an electric-car battery plant. Izumi Co. sank 1.2 percent after the food retailer said its quarterly profit declined.

The Topix climbed 0.5 percent to 1,285.24 at the close in Tokyo, with all but six of 33 industry groups advancing. The measure gained 2.6 percent this week. The Nikkei 225 Stock Average added 0.6 percent today to 15,437.13. The yen traded at 102.05 per dollar after falling 0.4 percent yesterday.

“The yen weakened due to the U.S. jobs data, and that’s a reason to buy Japanese stocks,” said Naoki Fujiwara, Tokyo-based chief fund manager at Shinkin Asset Management Co., which oversees about 640 billion yen ($6.3 billion). “With an increase in U.S. jobs, we can hope for an increase in consumption, too. However, the U.S. is on holiday and we’re heading to the weekend, so gains are limited.”

Futures on the Standard & Poor’s 500 Index fell 0.1 percent. The equity measure climbed to a record yesterday, while the Dow Jones Industrial Average topped 17,000.

U.S. Jobs

U.S. nonfarm payrolls rose by 288,000 workers in June following a 224,000 gain in May that was bigger than previously estimated, Labor Department figures showed yesterday in Washington. A 1.39 million increase in employment over the past six months was the largest since early 2006, while the unemployment rate fell to 6.1 percent, the lowest level since September 2008.

“The employment data were a surprise,” said Masaaki Yamaguchi, an equity market strategist at Nomura Holdings Inc. in Tokyo. “When you also consider that the yen has weakened past 102 per dollar, it’s positive for Japanese stocks.”

Honda, which counts North America as its biggest market for sales, rose 1 percent to 3,570 yen. Toyota Motor Corp., the world’s largest carmaker, added 0.5 percent to 6,201 yen. Consumer-electronics manufacturer Sony Corp. increased 1.4 percent to 1,720 yen.

Seven & I rose 2 percent to 4,447 yen, its highest close in six months. First-quarter operating profit rose 5.1 percent to 77.5 billion yen, beating analyst estimates.

Panasonic rose 0.9 percent to 1,255 yen. The company said it’s negotiating details of the U.S. battery plant with Tesla, though the amount of funding is yet to be decided. Asahi newspaper reported Panasonic will invest over 20 billion yen in the electric-car maker.

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, John McCluskey

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