Japanese Stocks Rise; Nikkei 225 Hits Sixth Monthly Gain

Japanese stocks rose, with the benchmark Nikkei 225 Stock Average closing at its highest since April 2010, as Sumitomo Mitsui Financial Group Inc. and online clothier Start Today Co. posted positive results on the busiest day of earnings season.

Sumitomo Mitsui Financial led gains by Japan’s biggest banks after quarterly profit doubled, putting the lender on pace for record yearly earnings. Start Today surged 21 percent after raising its net-income forecast. Softbank Corp. gained 2.7 percent before reporting an increase in operating profit after the market closed. Alps Electric Co., which makes electronics for cars, jumped 9.7 percent to lead gains on the Nikkei 225 after saying it would cut 3,000 jobs worldwide.

The Nikkei 225 rose 0.2 percent in Tokyo after falling 1 percent earlier to close at 11,138.66, a 7.2 percent gain for January. The measure reached its highest level since April 27, 2010, posting a sixth monthly advance, the longest winning streak since August 2009. The broader Topix Index rose 0.6 percent to 940.25.

“With economic stimulus measures and a recovery in the U.S. economy, there are a lot of expectations about earnings for Japan going forward,” said Jun Nishizaki, chief portfolio manager at Nissay Asset Management Corp., which overseas about 34 billion yen ($374 million). “Profits are not that much higher this year than the last, but we’re expecting a 20 percent increase in profits in the next year.”

The Topix has surged about 30 percent since Nov. 14, when elections were announced on optimism Prime Minister Shinzo Abe’s new government will take steps to fight deflation. The gauge is trading at 1.1 times book value, compared with 2.25 for the Standard & Poor’s 500 Index and 1.62 for the Stoxx Europe 600 Index.

Earnings Season

More than 250 companies on the Topix posting results. Of the 68 companies on the gauge that have reported earnings so far this quarter and for which Bloomberg has estimates, 56 percent have exceeded profit expectations. Some 53 percent of companies missed sales projections, the data show.

Volume on the Nikkei 225 was about 24 percent above its 30-day average. The Nikkei Stock Average Volatility Index fell 2 percent to 23.29, indicating traders expect a swing of about 6.7 percent on the benchmark gauge over the next 30 days.

Sumitomo Mitsui Financial, Japan’s second-biggest lender by market value, gained 5.2 percent to 3,670 yen. Net income more than doubled to 219.4 billion yen in the three months ended Dec. 31 from 97.2 billion yen a year earlier, company figures showed yesterday. That puts the lender on track to beat its annual profit record of 686.8 billion yen posted in 2006.

Alps, Softbank

Start Today surged 21 percent to 880 yen, the second-biggest gain on the Topix. The company said net income for the year ending March 31 will be 2.3 percent higher than a year earlier.

Softbank gained 2.7 percent to 3,260 yen, the biggest boost on the Topix. The company said nine-month operating profit climbed 13 percent to 600 billion yen after markets closed.

Alps Electric jumped 9.7 percent to 533 yen, the biggest increase on the Nikkei 225. The company said it would cut 3,000 jobs worldwide after forecasting a full-year loss.

Among stocks that fell, Nintendo Co., the world’s largest maker of gaming consoles, lost 4.6 percent in Osaka after forecasting an operating loss on lower-than-expected sales of its Wii U game console.

Futures on the S&P 500 fell 0.1 percent today. The measure fell 0.4 percent yesterday as the Federal Reserve said it would maintain its program to buy securities and the economy unexpectedly shrank 0.1 in the fourth quarter.