Nikkei Hits Post-Quake High as Advertisers, Developers Rebound

Japanese shares rose, pushing the Nikkei 225 Stock Average to its highest level since the March 11 earthquake, as a recovery in demand boosted advertisers and real estate developers.

Dentsu Inc., Japan’s largest ad company, advanced 3.9 percent after sales improved following a slump in the wake of the natural disaster. Mitsubishi Estate Co. led gains among the biggest developers after Bank of America Merrill Lynch raised its target price, saying demand for office space is recovering. Toyota Motor Corp. advanced 1.3 percent after a U.S. jobs report boosted confidence in the automaker’s biggest market.

“Corporate Japan has recovered from the earthquake faster than investors expected,” said Junichi Misawa, head of equity investment at Tokyo-based STB Asset Management Co. “The first quarter has been so much better than what investors were expecting right after the quake.”

The Nikkei 225 gained 0.7 percent to 10,137.73 at the close in Tokyo. The gauge has risen three weeks running, adding 2.7 percent in the past five days. The broader Topix rose 0.4 percent to 874.34, with about three stocks rising for every two that fell.

The Topix has recovered about two-thirds of its losses since the quake, as manufacturers including Toyota restart factories ahead of schedule. In the last 30 days, the Topix has been the best performer among the world’s 10 biggest stock indexes, rising 7.6 percent.

Dentsu, Hakuhodo

Dentsu rose 3.9 percent to 2,452 yen after declines in revenue slowed last month. Sales fell 5 percent in June compared with drops of 12 percent and 6.4 percent in the previous two months, the Tokyo-based company said in a statement to the Tokyo Stock Exchange.

The announcement also boosted shares of Dentsu’s competitors. Hakuhodo DY Holdings Inc. jumped 4.5 percent to 4,520 yen and Asatsu-DK Inc. climbed 4.2 percent to 2,246 yen.

Real estate companies advanced after Merrill Lynch raised target prices on the three biggest, saying demand for office space is improving and large-scale property transactions have resumed.

Mitsubishi Estate, Japan’s second-biggest developer by sales, leapt 2 percent to 1,488 yen. Shares also got a boost from a Nikkei newspaper report that the developer plans to spend as much as 200 billion yen ($2.5 billion) to build three skyscrapers in downtown Tokyo. Larger Mitsui Fudosan Co. gained 0.6 percent to 1,462 yen.

Vacancy Rates

The Topix sub-index that tracks developers has gained 11 percent in the past month amid signs the property market is improving. Vacancy rates for offices in Tokyo fell for a third month in June, broker Miki Shoji Co. said yesterday.

Exporters to the U.S. also advanced today after reports showed that hiring and retail sales improved in the world’s biggest economy. U.S. employers added 157,000 workers last month, up from 36,000 in May, according to ADP Employer Services. The median forecast in a Bloomberg survey was for 70,000 new jobs.

“Jobs rebounded in June after slumping in May because of the impact on the car industry from Japan’s earthquake,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “The job data shows the drop was temporary.”

Toyota, which gets 28 percent of its sales in North America, rose 1.3 percent to 3,445 yen. Honda Motor Co., Japan’s No. 2 carmaker by revenue, increased 1.4 percent to 3,260 yen. Canon Inc., the world’s biggest camera maker by sales, jumped 1.8 percent to 3,920 yen.

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