Japan Stocks Rise Amid Yen Weakness Ahead of BOJ Meeting

Japanese stocks rose a second day, led by brokerages, as the yen weakened against the dollar ahead of policy meetings at the Bank of Japan and the European Central Bank.

Nomura Holdings Inc., Japan’s biggest securities company, added 2.6 percent. Kobe Steel Ltd. climbed 6.3 percent after Credit Suisse Group AG raised its share-price target on the company. Trading company Itochu Corp. dropped 2.5 percent after saying it’s considering a joint investment in Citic Ltd. Japan Exchange Group Inc. gained 3.4 percent after raising its full-year profit forecast.

The Topix index added 1.8 percent to 1,397.63 at the close in Tokyo, with all but one of its 33 industry groups rising. The Nikkei 225 Stock Average gained 2.1 percent to 17,366.30. The yen fell a third day, dropping 0.7 percent to 118.43 per dollar. Futures on the Standard & Poor’s 500 Index climbed 0.3 percent, with U.S. markets closed Monday for Martin Luther King Day.

“The yen is weakening on expectations for further stimulus measures from the ECB, which is supporting stocks,” said Tomomi Yamashita, who helps oversee the equivalent of $6.3 billion at Shinkin Asset Management Co. in Tokyo. “Also, if you exclude external factors for Japan, then expectations are high for good earnings results. It may not be enough to push the market higher, but it’ll be a good support.”

The BOJ meets today and tomorrow in Tokyo with all 33 economists surveyed by Bloomberg News forecasting no change to monetary policy after it boosted an already unprecedented bond-buying program in October.

Euro Stimulus

The ECB also meets, with speculation it will unveil additional stimulus measures on Jan. 22. ECB President Mario Draghi is likely to announce a 550 billion euro ($640 billion) bond-purchase program, economists forecast.

“The U.S. market is closed so the situation hasn’t changed much,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo, said by phone. “Hopes for more European easing will support Japanese stocks. I expect the Nikkei 225 to maintain 17,000 yen.”

The Topix Securities Index gained 3.1 percent as brokerages led groups among the broader gauge’s industry groups. Nomura rose 2.6 percent to 632.7 yen. Daiwa Securities Group Inc. advanced 3.2 percent to 882.5 yen.

Kobe Steel jumped 6.3 percent to 203 yen, the most since July 2013, after its share price target was raised to 320 yen from 220 yen at Credit Suisse. The company is seen as the only global provider of metals such as aluminum in the shift towards lighter weight automobiles, analyst Shinya Yamada wrote in a report.

Citic Investment

Itochu slumped 2.5 percent to 1,207 yen. The trading house and Thai agribusiness Charoen Pokphand Group plan to jointly buy a 10 percent in Citic, the listed unit of China’s state-owned investment corporation, for HK$34.4 billion ($4.4 billion), according to a Hong Kong exchange filing. They will also purchase HK$45.9 billion of convertible preferred stock, which if converted would boost their stake to 20.6 percent.

Japan Exchange gained 3.4 percent to 2,775 yen. The company raised its full-year net-income forecast by 26 percent to 26.5 billion yen. The revision is still below analysts’ predictions for 32.3 billion yen in profit.

Chinese data today showed growth in the world’s second-biggest economy beat economists’ estimates last quarter, with full-year expansion of 7.4 percent close to the government’s target. The growth suggests stimulus efforts have started to boost demand.

The International Monetary Fund cut its global growth forecast to 3.5 percent in 2015, down from 3.8 percent projected in October, the steepest outlook reduction in three years. The Washington-based lender also trimmed its estimate for next year to 3.7 percent expansion compared with 4 percent projected in October.

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