Nikkei 225 Halts Two-Day Decline on Weaker Yen, BOJ Bets

Japanese shares rose, with the Nikkei 225 Stock Average halting a two-day drop, as the yen weakened after a contender to become the next Bank of Japan governor signaled support for more monetary easing.

Canon Inc., a camera maker that gets 27 percent of its revenue in the Americas, rose 2.2 percent. Softbank Corp. rose 4.7 percent on a report that U.S. regulators had rejected a request to delay a review of the mobile carrier’s acquisition of Sprint Nextel Corp. Dentsu Inc. surged 10 percent after the advertising company’s nine-month net income jumped.

The Nikkei 225 gained 1.9 percent to close at 11,369.12 in Tokyo after equity markets were shut yesterday for a holiday. The broader Topix Index advanced 1.2 percent to 968.50, with 28 of 33 industry groups advancing.

“Investors are raising their hopes about what the BOJ will do from here because it has yet to start bold monetary easing,” said Koichi Kurose, chief economist in Tokyo at Resona Bank Ltd., which oversees about 15 trillion yen ($160 billion). “I think the Nikkei will climb to 12,000 in March or April.”

The Topix surged about 34 percent since elections were announced on Nov. 14 amid optimism a new government will take aggressive steps to weaken the yen and beat deflation. The government will continue efforts to drive the Nikkei 225 to 13,000 by the end of March, said Economy Minister Akira Amari, according to Kyodo News. The gauge is trading at 1.1 times book value, compared with 2.1 for the Standard & Poor’s 500 Index and 1.5 for the Stoxx Europe 600 Index.

Bank of Japan

The nation could usher in a growth spurt unseen in a generation by stepping up stimulus and ending deflation, according to Haruhiko Kuroda, the head of the Asian Development Bank and a potential candidate to take over the central bank. BOJ Governor Masaaki Shirakawa, 63, said last week he will step down ahead of schedule on March 19.

The yen touched 94.46 against the dollar yesterday, the weakest since May 2010. A weaker Japanese currency boosts overseas earnings at Japanese exporters.

Canon rose 2.2 percent to 3,305 yen. Toyota Motor Corp., a carmaker that generates 25 percent of its sales from North America, added 0.5 percent to 4,920 yen.

Of the 224 companies on the Topix that have reported earnings so far this quarter and for which Bloomberg has estimates, 63 percent have exceeded profit expectations. Some 54 percent missed sales projections, the data show.

Dentsu soared 10 percent to 2,838 yen, its highest close since January 2008. The advertising firm’s nine-month net income rose 50 percent from a year earlier to 19.9 billion yen.

Renesas Drops

Renesas Electronics Corp. slumped 8.4 percent to 262 yen. The chipmaker fell as much as 13 percent today after widening its loss forecast as demand was sapped by slower sales of televisions and automobiles.

Nissan Motor Co. dropped 3.8 percent to 950 yen. Japan’s second-biggest carmarker by sales reported third-quarter profit that fell short of analysts’ estimates after sales tumbled in China and new models trailed competitors’ offerings in the U.S.

Softbank gained 4.7 percent to 3,545 yen. The U.S. Federal Communications Commission will maintain its original schedule for reviewing Softbank’s $20 billion offer for Sprint, dismissing a request for a delay from Dish Network Corp., the New York Post said, citing people close to the deal.

Sony Corp., Japan’s top exporter of consumer electronics, advanced 1.2 percent to 1,381 yen after cable-TV channel Starz extended a contract with Sony Pictures Entertainment Inc.

Futures on the S&P 500 slid 0.2 percent today. The measure fell less than 0.1 percent yesterday after a six-week rally pushed the gauge’s valuation up to the most expensive since July 2011.

Nuclear Test

Japanese shares maintained gains after North Korea held its third nuclear test today, underscoring a disregard for an international community that has already isolated the totalitarian state from the global economy.

The Nikkei Stock Average Volatility Index added 2 percent to 28.27, indicating traders expect a swing of about 8.1 percent on the benchmark gauge over the next 30 days.

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