JFE Leads Japan Steelmakers’ Rally on Yen, Demand: Tokyo Mover
JFE Holdings Inc. (5411), Japan’s second- biggest steelmaker, rose to its highest in 19 months and led a rally in shares of domestic mills amid optimism a weakening yen and demand growth will boost earnings.
JFE Holdings surged as much as 10.3 percent to 2,256 yen, its highest intraday level since July 7, 2011, on the Tokyo Stock Exchange. It traded 9.4 percent higher as of 1:11 p.m. local time. Kobe Steel (5406) gained 9.3 percent to 129 yen, while Nippon Steel & Sumitomo Metal Corp. (5401) rose 9 percent, its biggest increase in two years, to 278 yen.
The 32-member Topix Iron & Steel Index was the biggest gainer among industry gauges, climbing as much as 7.7 percent.
A weaker yen will benefit Japanese steelmakers by making their products cheaper than those from Asian rivals in overseas markets. Steel sales in Japan and abroad will grow on demand from infrastructure projects and carmakers, said Masayuki Otani, a Tokyo-based strategist at Securities Japan Inc. The shares are rallying on these expectations, he said.
The Japanese currency fell to 92.97 per dollar on Feb. 1, the weakest since May 2010. The yen rose 0.1 percent to 92.70 as of 12:31 p.m. in Tokyo today.
Daiwa Securities Co. analyst Jiro Iokibe upgraded his rating on JFE Holdings to buy from neutral, according to an investor note dated Feb. 1. JFE Holdings last week reported a profit in its fiscal third quarter, compared with a loss a year earlier, aided by lower costs and a weaker yen.
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