Japanese Stock Futures Gain on U.S. Confidence, Spending

Japanese stocks rose, with the Nikkei 225 Stock Average closing higher for the first time in four days, as stronger-than-forecast U.S. consumer sentiment and spending bolstered optimism on the global economic recovery.

Honda Motor Co., a carmaker that gets almost half of its revenue in North America, advanced 2.1 percent. Fanuc Corp., a producer of robotics for mainland factories, gained 2 percent on stronger Chinese manufacturing data. NGK Insulators Ltd. sank 8.8 percent after saying it may not be able to supply batteries for a regional utility’s power plant.

“The U.S. economy is moving toward a recovery, boosting expectations Japan will follow,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd. “Investors are buying shares, looking on the bright side of Chinese data.”

The Nikkei 225 rose 0.3 percent to 10,109.87 at the 3 p.m. close in Tokyo, with volume 7.6 percent lower than the 30-day average. The broader Topix Index added 0.2 percent to 856.05, paring gains in the final minutes of trading after rising as much as 1 percent as the Bank of Japan’s Tankan survey showed companies are skeptical the yen will continue to depreciate.

Futures on the Standard & Poor’s 500 Index rose 0.2 percent today. The gauge gained 0.4 percent in New York on March 30 after a report showed U.S. consumer sentiment climbed to the highest since February 2011, boosting prospects for exporters. Americans increased spending by the most in seven months, according to a separate report from the U.S. Commerce Department.

Honda rose 2.1 percent to 3,210 yen. Canon Inc., the world’s biggest camera maker, climbed 2.1 percent to 3,990 yen. The stock also got rose after its target price was raised to 4,300 yen from 4,000 yen by Barclays Capital.

China Manufacturing

The yen weakened after better-than-expected Chinese manufacturing data boosted confidence in the global economy. A Purchasing Managers’ Index rose to a one-year high in March, the National Bureau of Statistics said yesterday. A similar gauge from HSBC Holdings Plc and Markit Economics fell to a four-month low, with HSBC saying the government-backed PMI was skewed to large enterprises and usually gained after the Lunar New Year.

Fanuc gained 2 percent to 14,970 yen. TDK Corp., a manufacturer of electronic parts which gets almost a third of its revenue from China, climbed 2.4 percent to 4,800 yen.

The yen depreciated to as low as 83.30 against the dollar today in Tokyo, compared with 81.93 at the close of stock trading on March 30. Japan’s currency weakened to 111.14 against the euro from 109.38. A weaker yen boosts overseas income at Japanese companies when repatriated.

Tankan Index

Stocks pared gains in the final minutes after a note from Jeffries Japan Ltd. said the Bank of Japan hasn’t done enough to bolster business confidence. Today’s Tankan survey showed that executives expect the sentiment index to remain negative at minus 3 in June and the yen to strengthen about 6 percent from today’s level to average 78.14 per dollar this fiscal year.

The Topix has risen 8.8 percent since Feb. 14, when the Bank of Japan extended its government-bond purchases, weakening the yen. The gain has boosted the value of stocks on the Topix to 1.05 times book value, up from 0.88 in December, according to Bloomberg data. A number below one means companies can be bought for less than value of their assets.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender by market value, jumped 3.4 percent to 426 yen, the most-active stock by value in Japan. The lender is considering spending “several billion” dollars to buy a U.S. regional bank, incoming bank unit President Nobuyuki Hirano said.

The lender is searching for targets mainly on the West Coast to expand its commercial operations, said Hirano, who became head of Bank of Tokyo-Mitsubishi UFJ Ltd. yesterday.

Shippers Gain

Kawasaki Kisen Kaisha Ltd., Japan’s third-largest shipping line by revenue, gained the most in the Nikkei 225, jumping 6 percent to 193 yen after a measure of commodity-shipping rates gained on higher grain exports from South America. Mitsui O.S.K. Lines Ltd., the No. 2, rose 2.5 percent to 369 yen, while Nippon Yusen K.K., the largest, jumped 3.1 percent to 268 yen.

NGK Insulators declined the most on the Nikkei 225, plunging 8.8 percent to 1,077 yen after saying Tohoku Electric Power Co. is reviewing a plan to install NGK Insulators’ batteries at the utility’s Noshiro power plant. Tohoku Electric slipped 1 percent to 935 yen.

The Nikkei Stock Average Volatility Index, a measure of Japanese option prices, slid 2.5 percent to 18.94 today, suggesting a possible 5.4 percent swing in the Nikkei 225 in the next 30 days.

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