Japan Stocks Snap Longest Loss Streak Since ‘09

Japan Stocks Snap Longest Loss Streak Since ‘09 on U.S. Earnings
Pedestrians look at an electronic stock board outside a securities firm in Tokyo, Japan. Photographer: Haruyoshi Yamaguchi/Bloomberg

 Japanese stocks rose, with the Nikkei 225 Stock Average snapping its longest run of losses since 2009, on optimism about U.S. earnings. Shares extended gains after Bank of Japan Governor Masaaki Shirakawa pledged to continue to add monetary stimulus.

Furukawa Electric Co., which produces aluminum products, jumped 3.9 percent after industry bellwether Alcoa Inc. opened U.S. earnings season with an unexpected profit. Fanuc Corp., Japan’s biggest manufacturer of factory robotics, gained 2.7 percent after Citigroup recommended global industrial companies. Kawasaki Kisen Kaisha Ltd. fell 2.3 percent on concern oil cargoes from Iran won’t be covered by Japanese insurers because of sanctions on the Islamic Republic.

The Nikkei 225 gained 0.7 percent to 9,524.79 at the 3 p.m. close in Tokyo after swinging between gains and losses at least 10 times. The gauge advanced for the first time in eight days, the longest losing streak since July 2009. The broader Topix Index added 0.5 percent to 809.88 with about two stocks rising for each that fell.

“The market was ready for a rebound after falling seven days,” said Yutaka Miura, a senior technical analyst at Mizuho Securities Co. After Alcoa reported results, “investors want to see whether other companies’ earnings will beat or miss estimates.”

The Nikkei 225 gained 13 percent this year on optimism the Bank of Japan will introduce more measures to spur growth after boosting its asset-purchase program in February and that reconstruction after last year’s disasters will escalate. The gauge pared gains since April 3 after the Federal Reserve damped expectations for more monetary easing and rising borrowing costs in Europe raised concern about the debt crisis.

Alcoa, Beige Book

Futures on the Standard & Poor’s 500 Index gained 0.5 percent today. The gauge rose 0.7 percent in New York yesterday after Alcoa, the largest U.S. aluminum producer, reported an unexpected profit, lifting expectations for earnings season. The Federal Reserve’s Beige Book survey showed the U.S. economy maintained its expansion as manufacturing, hiring and retail sales showed signs of strength in the face of higher fuel prices.

Furukawa Electric gained 3.9 percent to 211 yen. Nippon Light Metal Co., an integrated aluminum producer, added 2.6 percent to 117 yen.

Spanish Yields Fall

Stocks also rose after Spanish yields retreated from this year’s high, while the European Central Bank spurred speculation it may buy Spanish bonds to help reduce borrowing costs.

Fanuc gained 2.7 percent to 14,600 yen after Citigroup upgraded global industrial companies to overweight, maintaining a buy rating on the Japanese firm.

Hitachi Construction Machinery Corp. advanced 4.1 percent to 1,800 yen after the Nikkei newspaper reported its operating profit for the year ending in March may rise to 80 billion yen, beating expectations. The report cited sales of dump trucks and excavators for coal mining for the projected rise.

Shipping companies fell the most among the Topix’s 33 industry groups as tankers using Japan’s shipping-insurance association to purchase coverage for Iranian crude cargoes will be liable for any costs not recovered through reinsurance due to sanctions against nation, according to the Japan Ship Owners’ Mutual P&I Association’s website.

Kawasaki Kisen, Japan’s third-biggest shipping line by sales, fell 2.3 percent to 170 yen. Nippon Yusen K.K., the sector leader, lost 1.2 percent to 239 yen. Mitsui O.S.K. Lines Ltd. fell 4.2 percent to 317 yen.

Shares on the Topix are valued at 0.99 times book value, compared with 1.36 times for the MSCI Asia Pacific Index, 2.21 times for the S&P 500 and 1.39 times for the Stoxx Europe 600 Index. A number below one means that investors can buy companies for less than the value of their assets.

The Nikkei 225 Volatility Index fell 4.1 percent to 20.26, indicating traders expect a swing of about 5.8 percent on the benchmark gauge over the next 30 days. Trading volume was 12 percent below the 30-day average.

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