Japanese Stocks Climb Before ECB as Weaker Yen Boosts Exporters

  • Carmakers, electrical-appliance shares biggest boost to Topix
  • Trading volumes light as investors await Draghi decision

Japanese stocks rose for the first time in four days as a weaker yen boosted exporters and investors awaited a policy decision by the European Central Bank.

The Topix index added 1.5 percent to 1,352.17 at the close in Tokyo, with more than eight shares rising for each that fell. Volume was about 29 percent lower than the 30-day average. The gauge lost 3.1 percent over the previous three sessions after a three-week rally of 15 percent. The Nikkei 225 Stock Average advanced 1.3 percent to 16,852.35 on Thursday, while the yen slid 0.3 percent to 113.69 per dollar. Most Asian shares advanced on speculation central banks will take steps to bolster growth.

“It would be natural for the ECB to boost stimulus,” said Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo. “The yen weakening is positive. A market where investors are overtly negative has ended.”

Carmakers and electrical-appliance manufacturers were the biggest boosts to the Topix. Toyota Motor Corp. climbed 3 percent, while Sony Corp. added 4.2 percent. Nippon Paper Industries Co. jumped 6.7 percent after Credit Suisse Group AG raised its rating on the stock. Kansai Electric Power Co. plunged 15 percent after a court issued an injunction preventing the utility from operating two of its nuclear reactors due to safety concerns.

Policy Meetings

Futures on the S&P 500 rose less than 0.1 percent. The underlying equity gauge gained 0.5 percent on Wednesday as energy companies led the advance.

The ECB’s decision on Thursday and a Federal Reserve meeting next week may provide more insight on the potential for further stimulus and the trajectory of interest rates. The Bank of Japan issues its next decision on March 15.

The BOJ started negative interest rates last month, while the ECB has signaled it may lower rates further into negative territory. The ECB is forecast to ease policy via measures including an interest-rate cut and an expansion of quantitative easing, according to economists surveyed by Bloomberg. Traders see a 73 percent chance the Fed will raise borrowing costs by the end of the year.

Central bank discussions on monetary stimulus follow a global equity rout that began at the start of the year. The Topix plunged into a bear market in January before hitting a low on Feb. 12. The gauge has since recovered about 13 percent.

“There are expectations for easing in Europe,” said Koichi Kurose, Tokyo-based chief market strategist at Resona Bank Ltd. “If there’s nothing, it’s going to be a big negative surprise.”

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