Topix Follows U.S. Equities Higher as Japan Returns to Growth

Japanese stocks rose after U.S. equities climbed to a record and a report showed Asia’s second-biggest economy exited recession last quarter.

Financial shares and oil producers led gains among industry groups. Yokohama Rubber Co. jumped 5.5 percent as the tiremaker raised its dividend forecast. Asics Corp. tumbled 10 percent after the sportswear maker projected profit that missed estimates. Kuraray Co. dropped 5.7 percent after full-year net-income forecasts disappointed analysts.

The Topix index gained 0.7 percent to 1,459.43 at the close in Tokyo, with two stocks rising for each that fell. The measure climbed 2.3 percent last week. The Nikkei 225 Stock Average advanced 0.5 percent to 18,004.77. The yen added 0.2 percent to 118.52 per dollar, strengthening a third day.

Even though Japan’s gross domestic product growth “missed estimates, the figures are positive, which means at least the direction of the recovery is right,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank in Tokyo, which oversees $325 billion in assets. “I would say the data today is mixed. People haven’t completely lost hope on growth.”

Japan’s economy expanded 2.2 percent in the fourth quarter on an annualized basis, after contracting the previous two periods. The median expectation of 32 economists surveyed by Bloomberg before the provisional data was for growth of 3.7 percent.

Abe Challenge

The softness of the rebound shows Prime Minister Shinzo Abe’s challenge to revive the economy from two decades of stagnation. Wage rises and increased consumer spending are likely to be pivotal this year to spur activity beyond the export sector, where the lower yen has contributed to surging profits at companies like Toyota Motor Corp.

The yen climbed 0.3 percent versus the greenback last week, with the Bank of Japan said to view further monetary easing as counterproductive for now. More stimulus could trigger losses in the currency that damage confidence, people familiar with the central bank’s discussions said last week. The BOJ meets this week.

Futures on the Standard & Poor’s 500 Index slipped 0.1 percent after the underlying gauge rose to a record on Feb. 13. U.S. markets are closed Monday for a holiday.

“With U.S. stocks reaching records, it’s likely Japanese stocks will rise above last December’s highs,” Shoji Hirakawa, chief equity strategist at Okasan Securities Co. in Tokyo, said by phone.

Europe Boost

Data indicating that the euro region’s economy regained some momentum underpinned equity gains on Feb. 13, with a gauge of global stocks climbing to an almost three-month high.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, gained 3.1 percent to 729 yen. Nomura Holdings Inc., the country’s No. 1 brokerage, added 2.4 percent to 679.6 yen. MS&AD Insurance Group Holdings Inc. jumped 4.5 percent to 3,220.5 yen.

Yokohama Rubber climbed 5.5 percent to 1,114 yen. The tiremaker boosted its total forecast for dividend payments in the year ending Dec. 31 to 40 yen per share from 26 yen.

Asics tumbled 10 percent to 2,666 yen, the biggest drop since November 2011. The company announced a full-year profit target of 21 billion yen, missing analysts estimates for 23 billion yen.

Kuraray lost 5.7 percent to 1,428 yen after reporting nine-month results that were below estimates.

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