Japan Stocks Climb From Eight-Month Low as Global Selloff Eases

  • Japan Tobacco plunges to post biggest drop on the Nikkei 225
  • Topix falls 8.2% in September, worst monthly loss since 2012

Japanese stocks rose, with the Topix index climbing from an eight-month low, as a global equity slump eased. Automakers provided the biggest support to the benchmark gauge after China cut taxes on car purchases.

Toyota Motor Corp. added 3.8 percent while Mazda Motor Corp. jumped 5.9 percent. Japan Tobacco Inc., Asia’s largest listed cigarette-maker, sank 6.7 percent after agreeing to buy the international rights to Reynolds American Inc.’s Natural American Spirit division for about $5 billion, or 286 times Natural American Spirit’s profit before income taxes in 2014.

The Topix added 2.6 percent to 1,411.16 at the close of trading in Tokyo after tumbling 4.4 percent Tuesday to its lowest level since January. The measure capped its worst monthly loss since May 2012 and its biggest quarterly decline since 2010. The Nikkei 225 Stock Average added 2.7 percent to 17,388.15. The Standard & Poor’s 500 Index rose 0.1 percent yesterday, halting a five-day drop.

“Global markets overnight weren’t as stormy as people were fearing yesterday,” said Masanori Ikunaga, a Tokyo-based fund manager at Sumitomo Mitsui Asset Management Co. “Everyone is more sensitive to risk, and while there wasn’t really a reason for shares to fall as much as they did yesterday, there also isn’t an obvious reason why they’re up so much today.”

U.S. Shares

E-mini futures on the S&P 500 added 0.8 percent. Equities in the world’s biggest stock market swung between gains and losses for much of Tuesday as health-care companies rebounded, while biotechnology shares erased an early rally. Apple Inc. dragged technology companies lower. Glencore Plc rose 17 percent in London, a day after the trader and miner’s record plunge intensified concern about how material companies are weathering the slump in commodity prices. The trader jumped 14 percent in Hong Kong on Wednesday.

The Topix retreated 13 percent in the three months through September, only its second quarterly decline since Prime Minister Shinzo Abe came to power. The measure has slumped 8.2 percent in September as concern about the slowdown in China and the Federal Reserve’s rate-increase plans spurred global financial-market turmoil.

“It’s a bit of a relief rally today,” said David Welch, head of equity sales trading at Reorient Group in Hong Kong. “Glencore is the global bellwether for trader sentiment right now, and their comments overnight and the 17 percent rally in the share price has helped stabilize stock prices.”

Data Misses

Japan’s industrial output fell 0.5 percent in August from a month earlier, according to a preliminary report Wednesday. Economists had expected a 1 percent increase. Data on retail sales also missed estimates.

The nation should assemble a stimulus package to shore up its economy before the central bank further cranks up a campaign of unprecedented easing, an adviser to Abe said Tuesday. The premier last week unveiled a three-pronged plan to revive growth. He vowed to expand national output by 20 percent, provide more support for child-rearing and bolster social security.

Toyota gained 3.8 percent for the biggest single boost to the Topix. Nissan Motor Co. added 5.6 percent while Mazda rose 5.9 percent. China’s central government cut a tax on passenger-vehicle purchases and said it will support the adoption of electric vehicles, according to the State Council, or cabinet.

Japan Tobacco

Japan Tobacco fell 6.7 percent, its biggest loss since December, erasing more than $4 billion from its market value. The cigarette maker is offering to pay Natural American Spirit about 22 times more than the pretax earnings multiple of tobacco deals from the past five years.

"We think the acquisition price can be viewed as overpriced," Satoshi Fujiwara, a Tokyo-based analyst at Nomura, wrote in a note to clients Wednesday.

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