Japan stocks rose a second day as the nation’s retail sales and U.S. housing data and durable goods orders gained more than estimated in May, showing signs of global economic strength before a European debt summit today.
Toyota Motor Corp., Asia’s biggest carmaker, rose 2.6 percent. Clothing retailer Shimamura Co. gained 2.6 percent. Eisai Co. climbed 3.1 percent after its partner won U.S. approval for a weight-loss drug.
The Nikkei 225 Stock Average rose 1.7 percent to 8,874.11 at the 3 p.m. close in Tokyo. The broader Topix Index gained 1.8 percent to 758.81, with almost four shares advancing for each that fell.
“The U.S. economy is recovering bit by bit,” said Yoshihisa Okamoto, who helps oversee about $34 billion at Mizuho Asset Management Co. “Japan is strengthening as demand recovers from the earthquake. Investors’ eyes are on companies that rely on domestic demand.”
The Topix has fallen 13 percent from its peak on March 27 as growth in the U.S. and China slowed amid concern Europe’s debt crisis is spreading. Stocks on the gauge are valued at 0.89 times book value, with a number below one meaning a company can be bought for less than the value of its assets.
Futures on the Standard & Poor’s 500 Index added 0.1 percent today. The gauge gained 0.9 percent in New York yesterday as contracts to buy existing homes and orders for durable goods rebounded in May, beating analysts’ expectations.
Toyota gained 2.6 percent to 3,110 yen. Funai Electric Co., a television maker that gets more than half of its sales from North America, jumped 3.3 percent to 1,203 yen.
“Worries about the U.S. housing market are fading,” said Mizuho Asset Management’s Okamoto. “There was concern U.S. efforts to lower interest rates weren’t raising demand for housing, but they may start taking effect.”
Europe’s leaders will meet today in Brussels amid a breakdown in consensus on how to safeguard Spain and Italy from higher borrowing costs. German Chancellor Angela Merkel shut the door on joint euro-area bonds, saying such securities are unconstitutional in Germany and economically “wrong and counterproductive.” Euro-area finance ministers earlier approved a bailout request from Cyprus.
Japanese stocks also gained after the Trade Ministry said retail sales advanced 3.6 percent from a year earlier after a 5.7 percent increase in April. The median estimate of 13 economists surveyed by Bloomberg News was for a 2.9 percent increase.
Shimamura climbed 2.6 percent to 9,010 yen. Edion Corp., an electronics retailer, advanced 3.4 percent to 400 yen.
Nitori Holdings Co. jumped 4.7 percent to 7,400 yen. The company reported a 26 percent gain to 9.86 billion yen ($124 million) in net income for the three months ended May 20, while sales rose 11 percent on recovering demand for furniture and interior goods.
Eisai gained 3.1 percent to 3,475 yen after San Diego-based partner Arena Pharmaceuticals Inc. won Food and Drug Administration approval for the first obesity medication cleared for the U.S. in 13 years.