Japanese Stocks Advance on Greece Debt Deal, Easing Bets
Nov. 27 (Bloomberg) -- Japanese stocks rose a fourth day after euro-zone finance ministers agreed to ease Greece’s debt burden and Japan’s opposition leader called for bold monetary easing to weaken the yen.
Shimano Inc., a maker of bicycle parts that depends on Europe for 36 percent of its sales, gained 0.9 percent in Osaka. Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest lender by market value, paced gains among banks. TDK Corp. (6762), a maker of electronic components that depends on China for 27 percent of its sales, rose 0.5 percent after mainland industrial profit growth accelerated in October.
The Nikkei 225 Stock Average (NKY) added 0.4 percent to close at 9,423.30 in Tokyo. The broader Topix Index advanced 0.3 percent to 781.60, with more than two stocks rising for each that fell.
Europe “jumped the latest hurdle in the debt crisis, and the market is taking a sigh of relief,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank by market value. “Greece’s budget crunch will probably resurface a few times.”
The Nikkei 225 gained 8.4 percent through yesterday from Nov. 14, when Prime Minister Yoshihiko Noda called for a Dec. 16 election, triggering speculation the opposition may win and call for more monetary easing.
The Topix traded at 0.9 times book value as of yesterday, compared with 2.1 for the Standard & Poor’s 500 Index and 1.5 for the Europe Stoxx 600 Index. A number less than one means that companies can be bought for less than the value of their assets.
Stocks advanced after European finance ministers agreed to cut Greece’s interest rates and gave it more time to pay back rescue loans. The nation was also cleared to receive a 34.4 billion-euro ($44.7 billion) aid installment in December.
Companies that do business in Europe gained, with Shimano adding 0.9 percent to 5,380 yen in Osaka. NTN Corp., a maker of machinery parts that gets 26 percent of its sales in the region, added 0.6 percent to 167 yen.
Shares also advanced today after Shinzo Abe, who polls suggest may become Japan’s next premier after next month’s election, said bold monetary easing will correct the yen’s strength. The currency fell against all of its 16 major counterparts.
“If politics lead a correction in the yen’s rise, that can be a game changer for Japanese stocks that have lagged behind since the Lehman Shock,” said Tetsuo Seshimo, a Tokyo-based portfolio manager at Saison Asset Management Co., which manages about 57 billion yen ($693 million).
Sumitomo Mitsui added 1.4 percent to 2,623 yen. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender, advanced 0.5 percent to 379 yen.
Futures on the Standard & Poor’s 500 Index gained 0.2 percent. The measure fell 0.2 percent yesterday as lawmakers prepared to debate the so-called fiscal cliff, a series of automatic tax increases and spending cuts that will occur unless a budget compromise can be reached.
Chinese industrial companies’ profit jumped in October and turned positive for the year as output accelerated and export growth picked up following a seven-quarter economic slowdown. Net income gained 20.5 percent from a year earlier to 500.1 billion yuan ($80.4 billion), the National Bureau of Statistics said today in Beijing.
TDK advanced 0.5 percent to 3,270 yen. Fanuc Corp. (6954), a maker of robots used in Chinese factories, gained 0.4 percent to 14,090 yen.
Trading volume on the Nikkei 225 was 7 percent above the 30-day average. The Nikkei Stock Average Volatility Index (VNKY) dropped 3.5 percent to 18.20, indicating traders expect a swing of about 5.2 percent on the benchmark gauge over the next 30 days.
Steelmakers fell the most among the Topix’s 33 industry groups after as Fitch yesterday cut the rating of Nippon Steel & Sumitomo Metal Corp., citing a global downturn in the industry. Nippon Steel slid 2 percent to 192 yen, while Nisshin Steel Holdings Co. dropped 4.2 percent to 549 yen.
Kondotec Inc. plunged 7.9 percent to 457 yen after the producer of construction materials said it planned to raise as much as 713.7 million yen in a share sale.
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