Japan’s Topix advanced for a third day as carmakers rallied after a key parts supplier said it will restart a factory damaged in last month’s earthquake.
Renesas Electronics Corp., a chipmaker that supplies more than 30 percent of the microcontrollers used in cars, surged as much as 6.2 percent after saying it will restart a damaged factory ahead of schedule. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., Japan’s top three automakers, gained at least 2.3 percent. Yaskawa Electric Corp. jumped 7.3 percent after Credit Suisse Group AG boosted its investment rating on the motor maker.
“Renesas’ production restart is good news for the market,” said Tsutomu Yamada, a market analyst at Kabu.com Securities Co. in Tokyo. “It’s good for semiconductors and also for carmakers. Investors are looking forward to the supply chain getting back to normal.”
The Topix advanced 0.1 percent to 842.18 at the close of trading in Tokyo, its third weekly gain in five as Japan’s stock market rebounds from losses in the wake of last month’s disaster. The Nikkei 225 Stock Average was little changed at 9,682.21, after earlier falling as much as 0.8 percent. Stock markets in Australia, New Zealand, Hong Kong and Singapore are closed today for a holiday.
Renesas to Restart
The Topix has declined 9.5 percent since a magnitude-9 earthquake and tsunami on March 11 devastated Japan’s northeast coast, disabled a nuclear power plant, and disrupted supply chains at companies from Toyota to Renesas. In the same period , the Standard & Poor’s 500 Index has risen about 3.3 percent, while the Stoxx Europe 600 Index dropped 0.9 percent.
Renesas gained 1.4 percent to 718 yen after saying it plans to restart production at a quake-halted plant in northern Japan. Shares reversed earlier losses and rose as much as 6.2 percent after the announcement.
Carmakers had the biggest advance among the Topix’s 33 industry groups, rebounding after declines during the morning trading session. Toyota gained 3.1 percent to 3,295 yen. Honda rose 2.3 percent to 3,145 yen, while Nissan increased 3.6 percent to 773 yen.
Retailers dropped after Prime Minister Naoto Kan proposed a 4-trillion yen ($49 billion) reconstruction budget that may entail a higher consumption tax. Economic and Fiscal Policy Minister Kaoru Yosano said this week that reconstruction “must” be backed by higher levies.
Taxes, ‘Less Money’
“Japanese people understand that consumption taxes have to go up to help pay for reconstruction,” said Ayako Sera, a strategist at Sumitomo Trust & Banking Co. in Tokyo, which manages about $331 billion in assets. “That leaves less money for consumer spending and that’s bad for stock prices.”
Seven & I Holdings Co., owner of the 7-Eleven convenience-store brand, slid 1.3 percent to 2,012 yen. Yamada Denki Co., an electronics retailer, slumped 1.7 percent to 5,330 yen.
Exporters also gained after the yen weakened. Japan’s currency depreciated to 81.87 as of 3 p.m. in Tokyo, weakening from 81.67 earlier. Against the euro, the currency fell to 119.38 from 118.83, boosting the value of overseas income at Japanese companies when repatriated.
Yaskawa Electric jumped 7.3 percent to 926 yen, the most on the Nikkei 225, after Credit Suisse Group AG boosted the company’s investment rating to “outperform” from “neutral.” Yaskawa secured alternative venders faster than expected after the earthquake damaged its part suppliers, Credit Suisse analyst Shinji Kuroda said today.