Japanese stocks rose, with the Topix Index closing above 1,000 for the first time since October 2008, as the U.S. services industry expanded at the fastest pace in a year amid optimism central banks will continue stimulus.
Honda Motor Co., a carmaker that gets 44 percent of its sales in North America, added 2 percent. Sharp Corp. soared 14 percent as the unprofitable television maker discussed a potential investment from Samsung Electronics Co., according to people familiar with the talks. Softbank Corp. surged 6.9 percent after Macquarie Securities said Japan’s third-largest mobile carrier may partner with Google Inc. and Amazon.com Inc.
The Topix advanced 1.5 percent to 1,003.22 in Tokyo, the highest close since Oct. 3, 2008. Four shares rose for each that fell. The Nikkei 225 Stock Average climbed 2.1 percent to 11,932.27, with volume down 22 percent from the 30-day average.
“Everybody is bullish and I’m a bit scared because I don’t see a dove, but I have to keep up with the rally,” said Kuninobu Takeuchi, Tokyo-based executive portfolio manager at DIAM Co., which manages about 10 trillion yen ($107 billion). “U.S. services data was excellent and I think the Bank of Japan will deliver nontraditional easing at its April meeting.”
The Topix surged 39 percent from Nov. 14 through yesterday on optimism a new government will beat deflation, with Prime Minister Shinzo Abe nominating easing proponent Haruhiko Kuroda to lead the central bank. The measure is trading at 1.2 times book value, compared with 2.1 for the Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index.
The BOJ starts a two-day policy meeting today, the last before Governor Masaaki Shirakawa steps down on March 19. Kuroda on March 4 vowed to do whatever necessary to end deflation if named to lead the central bank. The parliament will probably approve Kuroda as well as deputy governor nominees Kikuo Iwata and Hiroshi Nakaso, Kyodo News reported. The central bank will next meet from April 3-4.
Futures on the S&P 500 Index added 0.1 percent today. The U.S. equity gauge gained 1 percent yesterday. The Dow Jones Industrial Average climbed to a record, erasing losses from the financial crisis, as investors bet central banks will keep up the pace of stimulus. The Institute for Supply Management’s non-manufacturing index increased to 56 last month from 55.2 in January. Readings above 50 indicate expansion in services, which account for 90 percent of the U.S. economy.
Exporters to the U.S. advanced. Honda, Japan’s second-largest carmaker by market value, rose 2 percent to 3,545 yen. Toyota Motor Corp., the world’s No. 1 auto manufacturer, added 2 percent to 4,830 yen.
Sharp jumped 14 percent to 341 yen, leading gains on the Nikkei 225. The electronics maker announced after the close that it will sell 10.4 billion yen in shares to Samsung.
Softbank jumped 6.9 percent to 3,740 yen. As part of its buyout of Sprint Nextel Corp., Softbank may partner with Google and Amazon to create a mobile virtual network operator in the U.S., Macquarie analysts wrote in a note.
Fast Retailing Co., Asia’s biggest apparel chain, jumped 8.1 percent to 28,940 yen, capping its biggest two-day gain since April. The clothier’s price target was today raised to 25,000 yen from 16,800 yen at Deutsche Bank AG.
Tadano Ltd. gained 5.8 percent to 945 yen after the cranemaker was raised to outperform at Iwai Cosmo Securities Co.
The Nikkei Stock Average Volatility Index fell 4.4 percent to 24.80, indicating traders expect a swing of about 7.1 percent on the benchmark gauge over the next 30 days.