Japan Stocks Rise as Fed Says It’s Ready to Act if Needed
Japan stocks rose after the U.S. Federal Reserve’s pledge to provide additional support for the world’s largest economy if needed boosted exporters. Toyota Motor Corp. (7203) advanced after sales in the U.S. beat estimates.
Sony Corp. (6758), Japan’s No. 1 exporter of consumer electronics, climbed 2.4 percent after the yen fell from a two-month high against the dollar. Toyota, Asia’s biggest carmaker, advanced 1.3 percent. Tokyo Electric Power Co. (9501), operator of the crippled Fukushima nuclear plant, led utilities higher after its quarterly loss narrowed from a year earlier. Aozora Bank Ltd. (8304), controlled by Cerberus Capital Management LP, surged 9 percent after saying it’s close to a deal with stakeholders to repay public funds.
“There remains a significant risk that policy makers will keep intervening to support economic confidence and financial markets,” said Mikio Kumada, a Singapore-based global strategist for LGT Capital Management, which oversees more than $20 billion. “Overly bearish investors still risk being caught wrong-footed in rising markets. A reasonably constructive investment approach remains appropriate for now, with a slight tilt in favor of selected risky assets.”
The Topix lost 16 percent since this year’s peak on March 27 amid slowing growth in the U.S. and China, and concern Europe’s debt crisis is spreading. Shares on the gauge trade at 0.9 times book value, compared with 2.2 times for the Standard & Poor’s 500 Index and 1.4 times for the Europe Stoxx 600 Index. A number less than one means that companies can be bought for less than value of their assets.
About a half of the 199 companies on the Topix that have reported quarterly earnings since the start of last month and for which forecasts are available have missed expectations, according to data compiled by Bloomberg News.
Futures on the S&P 500 gained 0.2 percent today. The gauge dropped 0.3 percent in New York yesterday as the Fed’s pledge to provide additional support disappointed investors seeking a more definitive sign of further easing as the economy slows. A report released the same day showed manufacturing in the U.S. shrank a second month in July.
Exporters advanced as the yen retreated from a two-month high of 77.91 per dollar yesterday. Sony gained 2.4 percent to 964 yen. The electronics maker cut its full-year profit forecast after the close of market today. Bridgestone Corp. (5108), a tiremaker that generates 42 percent of its sales in the Americas, climbed 2.9 percent to 1,818 yen.
Toyota advanced 1.3 percent to 3,045 yen as its U.S. auto sales through July rose 28 percent to 1.21 million, ahead of its 15 percent full-year target.
Tokyo Electric Power jumped 10 percent to 141 yen after posting a net loss of 288.4 billion yen ($3.7 billion) for the quarter ended June 30, after a loss of 572 billion yen in the year-earlier period. It also widened its annual loss projection to 160 billion yen.
Aozora Bank gained 9 percent to 194 yen after saying it will soon announce details about the repayment of public funds. The lender is convening an extraordinary meeting of shareholders to implement a payment plan.
Nihon Unisys Ltd. (8056) advanced 5.7 percent to 573 yen after reporting first-quarter operating profit of 904 million yen, against expectations of a 529.5 million yen loss.
Teijin Ltd. slumped 9.2 percent to 207 yen after the fiber maker cut its fiscal-year operating profit forecast 19 percent after a 73 percent drop in the quarter ended June 30.
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