Nikkei 225 Heads for 12-Week Gain on Earnings, Weaker Yen

Japanese shares gained, with the Nikkei 225 Stock Average capping a 12-week advance, as positive earnings reports lifted the market and a weaker yen boosted exporters.

Sharp Corp. rose 5.8 percent on reports the television maker will record its first operating profit in five quarters before it posted earnings after the market close. Softbank Corp. increased 5.7 percent, a sixth-straight day of gains, after the mobile operator’s third-quarter profit doubled. NEC Corp. jumped 8.5 percent after the company swung to a profit from a loss last year. Toyota Motor Corp., the world’s biggest carmaker by market value, gained 3 percent as the yen reached the lowest level against the dollar since June 2010.

The Nikkei 225 rose 0.5 percent to close at 11,191.34 in Tokyo, capping a 2.4 percent gain this week as it extended its longest weekly winning streak since at least 1970. The broader Topix Index advanced 0.3 percent to 942.65, with about eight stocks rising for every seven that fell.

“There’s a good flow of money into stocks from more investors, and that’s going to support gains for a while,” said Juichi Wako, senior strategist at Nomura Securities Co. in Tokyo. “Investors are getting a clearer view about the expected recovery in corporate earnings, and that’s an added reason to buy.”

Topix Rally

The Topix has surged about 30 percent since Nov. 14, when elections were announced, through yesterday on optimism Prime Minister Shinzo Abe’s new government will take steps to fight deflation. The gauge is trading at 1.11 times book value, compared with 2.07 for the Standard & Poor’s 500 Index and 1.49 for the Stoxx Europe 600 Index.

Of the 123 companies on the gauge that have reported earnings so far this quarter and for which Bloomberg has estimates, 59 percent have exceeded profit expectations. Some 51 percent of companies missed sales projections, the data show.

Sharp rose 5.8 percent to 329 yen after the Nikkei newspaper reported it will return to operating profit. After the market closed, the TV-maker posted 2.66 billion yen in third-quarter operating profit, against a 24.5 billion yen loss in the year-earlier period. Results were helped by job cuts, asset sales and a weaker yen.

Softbank Profit

Softbank, controlled by billionaire Masayoshi Son, gained 5.7 percent 3,445 yen after doubling its third-quarter profit as company added new customers with Apple Inc. smartphones and tablet computers.

NEC jumped 8.5 percent to 242 yen, the highest since February 2011. The electronics maker reported a 24.4 billion yen operating profit for the third quarter. The company booked a 8.2 billion yen loss in the year-earlier period.

Toyota added 3 percent to 4,495 yen as the yen reached 92.27 per dollar today, the lowest since June 2010, boosting the earnings outlook for exporters. Mazda Motor Corp., an automaker that gets 28 percent of its sales in North America, gained 4.5 percent to 257 yen.

Among stocks that fell, component makers TDK Corp. and Kyocera Corp. slumped after cutting their operating profit forecasts. TDK plunged 6.8 percent to 3,155 yen, the second-biggest decline on the Nikkei 225. Kyocera lost 1.8 percent to 8,120 yen.

U.S. Jobs

Futures on the S&P 500 rose 0.3 percent today. The measure yesterday completed its best January rally since 1997. U.S. payrolls data today are expected to show employers added 165,000 jobs last month, according to economists’ estimates.

Volume on the Nikkei 225 was about 22 percent above its 30-day average at the market close. The Nikkei Stock Average Volatility Index rose 0.2 percent to 23.34, indicating traders expect a swing of about 6.7 percent on the benchmark gauge over the next 30 days.