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Nikkei 225 Climbs to Highest Since June on Yen, Analyst Ratings

Nov. 29 (Bloomberg) -- Japanese stocks rose, driving the Nikkei 225 Stock Average to the highest close since June, as the yen at a two-month low against the dollar improved the outlook for export earnings and analysts boosted investment ratings.

Nissan Motor Co., which is Japan’s third-largest carmaker by sales and gets about 75 percent of its revenue abroad, climbed 1.5 percent. Sony Corp., an electronics maker, and Marubeni Corp., a trading company, advanced at least 2.5 percent on higher brokerage ratings. Taiheiyo Cement Corp., Japan’s biggest cement maker by sales, gained 3.9 percent after the Nikkei newspaper said the company’s profit will likely jump.

“The yen is supporting Japanese stocks today,” said Naoteru Teraoka, general manager at Tokyo-based Chuo Mitsui Asset Management Co., which oversees $26 billion. “Japanese stocks are still lagging behind as people had sold stocks on concern about earnings because of the yen’s appreciation.”

The Nikkei 225 rose 0.9 percent to 10,125.99 at 3 p.m. in Tokyo, its highest close since June 21. The broader Topix index gained 0.9 percent to 874.59, with more than three times as many stocks advancing as declining. The two gauges climbed the most among major equity benchmark indexes in the Asia-Pacific region.

The Nikkei has dropped 4 percent this year, compared with gains of 6.6 percent for the Standard & Poor’s 500 Index in the U.S. and 5 percent for the Stoxx Europe 600 Index. Stocks in the Japanese gauge are valued at 17.7 times estimated earnings on average, compared with 14 times for the S&P 500 and 11.9 times for the Stoxx Europe 600 Index.

Yen Weakens

Nissan rose 1.5 percent to 797 yen. Kyocera Corp., an electronics maker that gets more than half of its sales outside Japan, advanced 1.9 percent to 8,600 yen. Nintendo Co., the world’s biggest maker of portable video-game machines, rallied 2.2 percent to 21,980 yen. Canon Inc., a camera maker that derives about 80 percent of its revenue abroad, gained 1 percent to 4,040 yen.

The yen depreciated to 84.20 against the dollar today in Tokyo, matching its rate in New York on Nov. 26 and the lowest level since Sept. 28. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.

“People are less worried that companies will cut their profit forecasts,” said Takero Inaizumi, head of equity research in Tokyo at Mizuho Investors Securities Co.

Sony advanced 2.8 percent to 2,970 yen, the highest close since May 13, after Nomura Holdings Inc. boosted its recommendation on the company to “buy” from “neutral.” The stock was the biggest support for the Topix.

Trading Companies Gain

Marubeni leapt 3.6 percent to 554 yen, the highest price since May. Goldman Sachs Group Inc. raised its rating on the company to “buy” from “neutral,” and Daiwa Securities Group Inc. increased its rating to “outperform” from “neutral.”

Other trading companies also increased as Nikko Cordial Securities Inc. reiterated its “buy” rating on the industry, citing earnings and valuations. Mitsubishi Corp., Japan’s largest commodities trader, gained 0.9 percent to 2,140 yen. Sojitz Corp. leapt 3.7 percent to 168 yen. Itochu Corp. rose 1.5 percent to 790 yen.

Masaaki Shirakawa, the governor of the Bank of Japan, said today in a speech that expanding a 5 trillion-yen ($59.5 billion) fund set up to buy government and corporate debt and other assets is a “probable option.”

“Shirakawa’s comment reassured the market,” said Takashi Hiroki, chief strategist at Monex Inc., a Tokyo-based brokerage.

Taiheiyo Cement jumped 3.9 percent to 106 yen. The cement maker will probably say operating profit tripled in the year ending March because of cost reductions and a recovery in demand in Japan, the Nikkei newspaper reported.

Sumitomo Osaka Cement Co., a smaller rival of Taiheiyo Cement, advanced 3.8 percent to 193 yen, the highest level since September 2009. The report said profit will probably rise 24 percent.

To contact the reporters on this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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