Japan Stocks Rise for 3rd Day on Bernanke Speech, Noda Election

Japanese stocks gained for a third day as Federal Reserve Chairman Ben S. Bernanke indicated the U.S. economy may not need more stimulus, and Finance Minister Yoshihiko Noda was elected head of Japan’s ruling party.

Sony Corp., Japan’s No. 1 exporter of consumer electronics, gained 2.8 percent. Kawasaki Kisen Kaisha Ltd., Japan’s third-largest shipper by market value, jumped 3.1 percent after Nomura Holdings Inc. said it was “bullish” on the industry. Softbank Corp., Japan’s third-largest mobile-phone operator, increased 2 percent after profiting from selling shares in Yahoo! Inc.

“Bernanke’s speech fell into what people had expected, but by extending the next meeting, it showed they are ready to introduce a measure,” said Kazuhiro Takahashi, a general manager at Daiwa Securities Capital Markets Co. in Tokyo. “U.S. stocks have stabilized, which is a plus for Japanese stocks.”

The Nikkei 225 Stock Average rose 0.6 percent to 8,851.35 as of the 3 p.m. trading close in Tokyo, reversing an earlier loss of as much as 0.5 percent. The broader Topix index gained 0.4 percent to 758.83 after falling as much as 0.6 percent.

Noda was chosen as leader by Democratic Party of Japan lawmakers over Trade Minister Banri Kaieda in 215-to-177 vote. The party is set to use its majority in the lower house to appoint him as prime minister to succeed Naoto Kan as soon as tomorrow.

Fed’s Outlook

Futures on the Standard & Poor’s 500 Index rose 0.8 percent today. The index gained 1.5 percent in New York on Aug. 26 after Bernanke said the central bank still has tools to stimulate the economy without signaling he will use them. He said a second day has been added to the next Federal Open Market Committee meeting in September to “allow a fuller discussion” of the economy and the Fed’s possible response.

U.S. stock, bond and commodity markets will open as usual today after Manhattan was spared the worst of Hurricane Irene, avoiding the first shutdown due to weather since 1985.

Stocks fell earlier before U.S. reports today forecast to show pending home sales dropped 0.9 percent in July and a summary of Texas manufacturing activity declined 8.5 percent this month.

Toyota Motor Corp., the world’s largest carmaker, lost 1.9 percent to 2,715 yen, while Honda Motor Co., which receives 40 percent of its sales from North America, declined 1.2 percent to 2,415 yen.

Jobs Report

“The market will be volatile as people wait for the FOMC meeting and next jobs data,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. “There’s no new negative or buying factors for Japanese stocks. It will be up to foreign investors.”

The Topix has lost 9.8 percent this month amid concern U.S. growth is sputtering and Europe’s debt crisis will damage the banking system, damping demand in two of Japan’s biggest export markets. The decline has cut the price of shares on the index to 0.89 times book value, the lowest since March 2009.

Shippers posted the fourth biggest gain among the 33 industry groups on the Topix index today after Nomura said it was “bullish” on the sector.

Kawasaki Kisen jumped 3.1 percent to 197 yen. Nippon Yusen K.K. and Mitsui O.S.K. Lines Ltd., Japan’s two largest shipping lines, gained 1.8 percent to 227 yen and 2.5 percent to 325 yen respectively.

Nomura said it expects demand for dry bulk services will recover next year and valuations are at attractive levels. The brokerage also rated Nippon Yusen and Mitsui O.S.K. a “buy’ and Kawasaki Kisen was rated “neutral.”

Softbank rose 2 percent to 2,543 yen, the third biggest support to the Nikkei 225. The mobile phone network operator said it booked a gain of 76.4 billion yen ($996 million) in the year ending March after selling Yahoo! Inc. shares to Citibank N.A. as part of its agreement to repay Citigroup Inc. for a $1.14 billion loan.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE