Japanese stocks rose, with the Topix index surging the most in more than five months, as the yen tumbled after the central bank doubled a growth funding facility while keeping its asset-purchase program unchanged.
The Topix index jumped 2.7 percent to 1,224 at the close in Tokyo, the steepest daily advance since Sept. 3. The Nikkei 225 Stock Average climbed 3.1 percent to 14,843.24 as the yen slid 0.7 percent against the dollar.
The Bank of Japan doubled a growth funding facility to 7 trillion yen ($68 billion) and said individual banks could borrow twice as much low-interest money as previously under another lending program. The timeframe of both programs was extended by a year, according to a statement today at the conclusion of the central bank’s two-day meeting.
“The BOJ didn’t change its main policy, but it was still able to send a message that it’s really watching the market,” said Takuya Takahashi, a senior strategist at Daiwa Securities Group Inc. “The decision came at a time when investors were getting bored of risk-off sentiment but couldn’t see many other catalysts.”
The BOJ maintained its plan to increase Japan’s monetary base by 60 trillion yen to 70 trillion yen a year, as forecast by all 34 economists surveyed by Bloomberg News.
Nissan Motor Co., an automaker that gets about 34 percent of revenue in North America, increased 2.1 percent. Renesas Electronics Corp. soared 8.6 percent after the Nikkei newspaper reported it will produce increasingly advanced chips for cars as early as this year. Konami Corp. added 7.2 percent after Tokai Tokyo Securities Co. recommended buying the gamemaker’s shares.
The Topix has fallen 6 percent this year, the most among major developed markets, as signs of a slowdown in China and a rout in developing-market currencies stoked concern about the global economy while the Federal Reserve cuts stimulus. The index jumped 51 percent last year as the BOJ’s unprecedented monetary easing weakened the yen and Prime Minister Shinzo Abe pressed ahead with his growth strategy dubbed Abenomics.
“I think investors had shorted Japanese stocks on bets the BOJ would do nothing, making the Japanese market trail others this month,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of 4.9 trillion yen. “Now the event is over and they are buying back shares.”
A gauge tracking lenders rose the most among the Topix industry groups, surging 4.3 percent in its biggest gain since June 28. Mitsubishi UFJ Financial Group Inc., the biggest company in the sector, jumped 5 percent to 626 yen. Sumitomo Mitsui Financial Group Inc., the second-largest, rose 5 percent to 4,876 yen.
Of the 297 companies on the Topix that reported quarterly earnings from the beginning of January and for which estimates were available, 65 percent beat analysts’ profit estimates, according to data compiled by Bloomberg.
The Topix traded at 1.20 times book value today, compared with 2.6 for the Standard & Poor’s 500 Index on Feb. 14. U.S. stock markets were closed yesterday for a holiday.