Topix Caps Biggest Weekly Rally Since November

Japanese stocks rose, with the Topix index capping its biggest weekly gain in three months as U.S. manufacturing data beat estimates, easing concern the world’s biggest economy may be weakening.

Mazda Motor Corp., an automaker that gets about 30 percent of revenue in North America, gained 2.9 percent. Aeon Financial Service Co. jumped 8.3 percent after the credit-card company announced a share buyback. KDDI Corp. added 2.9 percent on a report the mobile-phone operator expects operating profit to rise more than 10 percent next fiscal year.

The Topix gained 2.3 percent to 1,222.31 at the close in Tokyo after yesterday slumping the most since Feb. 4. Trading volume was 26 percent below the 30-day average and more than 20 stocks rose for each that fell on the index. The measure added 3.3 percent this week, the most since the period ended Nov. 15. The Nikkei 225 Stock Average climbed 2.9 percent today to 14,865.67.

“The U.S. manufacturing report showed that the economy isn’t all bad,” said Isao Kubo, a Tokyo-based equity strategist at Nissay Asset Management Corp., which oversees about 6 trillion yen ($59 billion). “Japanese stocks are rising after falling too much yesterday.”

Minutes of the Bank of Japan’s January meeting released today show officials agreed to keep watching global markets.

U.S. Economy

Futures on the Standard & Poor’s 500 Index rose 0.3 percent today. The equity measure gained 0.6 percent yesterday. The Markit Economics preliminary index of U.S. manufacturing increased to 56.7 in February, surpassing economists’ estimates, while Labor Department figures indicated fewer applications for unemployment benefits last week.

Exporters to the U.S. rallied. Mazda rose 2.9 percent to 493 yen. Toshiba Corp., a maker of electrical and electronic products that generates about 18 percent of its revenue in North America, gained 1.8 percent to 441 yen.

Investors have been dismissing lower-than-forecast U.S. economic data over the past two weeks, pointing to harsh winter weather as a reason for unexpected weakness in reports from housing to hiring. The Bloomberg ECO U.S. Surprise Index, which measures how much recent data has beaten or missed economists’ estimates, fell to minus 0.423 yesterday, the lowest since September 2011.

G-20 Gathering

Global finance chiefs will use weekend talks to recommend monetary policy be carefully calibrated and clearly communicated as they try to settle a spat between the U.S. and emerging markets over the wind-down of Federal Reserve stimulus.

The advice is contained in a draft communique for a meeting of Group of 20 policy makers scheduled to start tomorrow in Sydney, according to an official from a G-20 government involved in discussions of the statement, who asked not to be identified because deliberations aren’t public.

The Topix Oil & Coal index rose 3.9 percent, the most among the 33 industry groups on the Topix. Showa Shell Sekiyu K.K., an oil refiner, climbed 5.4 percent to 1,012 yen. JX Holdings Inc., a refiner, added 4.6 percent to 528 yen.

Aeon Financial jumped 8.3 percent to 2,537 yen after saying it will buy back as many as 12 million shares within a year for 25 billion yen.

KDDI added 2.9 percent to 5,866 yen after the Nikkei newspaper reported the mobile phone service expects to post an operating profit of more than 730 billion yen in the fiscal year ending March 2015, citing an interview with Executive Vice President Hirofumi Morozumi.

The Topix traded at 1.20 times book value today, compared with 2.59 for the S&P 500 and 1.86 for the Stoxx Europe 600 Index yesterday.

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