Japan Stocks Rebound From One-Month Low Ahead of U.S. Jobs Data

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Japanese stocks rose, rebounding from a one-month low, after U.S. equities advanced ahead of a monthly employment report.

Nintendo Co. soared 7.2 percent after President Satoru Iwata said the company’s move into mobile gaming will help double profit. Yamada Denki Co. rose 1.4 percent after the electronics retailer announced an alliance with SoftBank Corp. and forecast better-than-expected operating profit. SoftBank climbed 1.7 percent. Sumitomo Rubber Industries Ltd. tumbled 8.9 percent after posting a decline in quarterly operating income.

The Topix index climbed 0.8 percent to 1,587.76 at the close in Tokyo, with five stocks rising for every two that fell. The gauge gained 0.1 percent this week in trading shortened due to holidays. The Nikkei 225 Stock Average added 0.5 percent to 19,379.19.

“The stock market was shaken yesterday after long-term interest rates spiked following the holiday, but this catalyst seems to be calming down,” said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo. “If payrolls rebound to show growth of 240,000 to 250,000, we’ll see U.S. long-term yields spike and the yen weaken, which will be positive for Japanese shares. But if the data is worse than expected, we could see global stocks suffer a deeper correction as the market shifts toward a deflationary story.”

A report Friday in Washington will show U.S. employers added 228,000 workers to nonfarm payrolls in April, according to economists surveyed by Bloomberg. Investors are waiting to see if last month’s reading of 126,000 was a temporary sign of weakness or indicative of a longer, negative trend as the Federal Reserve weighs the timing of an interest-rate increase.

Mario Theme-Park

Nintendo jumped 7.2 percent to close at the highest level in four years after saying operating income will double to 50 billion yen in the fiscal year through March, beating analyst estimates for 32.7 billion yen. To stave off a slowdown in sales of consoles games, the company plans to rely on smartphone games, character figurines and theme-park attractions to boost earnings.

Yamada Denki gained 1.4 percent after forecasting operating profit this fiscal year will be 41.6 billion yen, beating analyst expectations for 34.6 billion yen. The company also announced a business alliance with SoftBank and agreed to sell a 6 percent stake to the mobile carrier.

SoftBank said in a statement the alliance will make use of Yamada Denki’s sales operations and SoftBank’s businesses in telecommunications, renewable energy and robotics. Shares of SoftBank closed up 1.7 percent.

Sumitomo Rubber slumped 8.9 percent, the most in four years, after operating income in the first quarter fell 34 percent to 12.1 billion yen, below estimates for 16.2 billion yen. Separately, Nomura Holdings Inc. said concerns remain related to the supply and demand of the company’s tires.

Earnings Season

Toyota Motor Corp., Japan’s biggest company by market value, joined Minebea Co. and Toshiba Corp. in reporting earnings Friday after markets close.

Of the Topix companies that have posted results this season and for which Bloomberg has estimates, 48 percent have posted better-than-expected profits, down from 67 percent in the previous period. Some 57 percent reported higher-than-predicted revenue, up from 53 percent.

“On a fundamental level, the earnings we’ve seen until now haven’t disappointed expectations for the most part,” said Yusuke Kuwayama, a portfolio manager at Tokio Marine & Nichido Fire Insurance Co. in Tokyo. “The outlook for Japanese stocks still isn’t negative.”

E-mini futures on the Standard & Poor’s 500 Index added 0.2 percent. The underlying measure gained 0.4 percent on Thursday in New York as Yahoo! Inc. led a rebound in technology shares.

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