Japanese Stocks Advance Most in Six Weeks as Oil Prices Surge

  • Gains led by insurers, energy explorers on Topix index
  • Crude oil prices rose to a four-month high on Tuesday

Japanese shares rose, with the Topix index posting its biggest gain in six weeks, as a weaker yen and higher oil prices increased investors’ appetite for risk assets.

The Topix added 2.6 percent to 1,332.44 at the close in Tokyo, it’s largest jump since March 2. Almost nine shares rose for each that fell. The Nikkei 225 Stock Average gained 2.8 percent to 16,381.22. The yen weakened for a second day to trade at 108.87 per dollar. Crude climbed to its highest level since November on Tuesday on prospects Saudi Arabia and Russia may agree to freeze oil production.

“Higher oil prices are triggering a retreat in risk-off moves,” said Masaaki Yamaguchi, a Tokyo-based equity market strategist at Nomura Holdings Inc. ““Strength in the yen is also easing, and the currency market is tilted toward a risk-on direction.”

All 33 Topix industry groups rose. Exporters including electrical-appliance manufacturers and carmakers were the biggest boosts to the benchmark gauge. Toyota Motor Corp. advanced 2.5 percent. Oil explorer Inpex Corp. climbed 3.9 percent, while Japan Petroleum Exploration Co. added 3.7 percent.

Crude oil prices jumped 4.5 percent to $42.17 per barrel in New York on Tuesday, the highest settlement since November 25. The commodity rose after Russia’s Interfax news agency reported Saudi Arabia and Russia had reached a consensus on an output freeze, citing an unidentified “informed diplomatic source” in Doha.

Futures on the Standard & Poor’s 500 Index advanced 0.3 percent after the underlying U.S. equity gauge rose 1 percent to a one-week high on Tuesday.

“Oil prices have rebounded, and the U.S. market is becoming slightly risk-on,” said Chihiro Ohta, general manager of investment information at SMBC Nikko Securities Inc. in Tokyo. “With oil prices higher, U.S. financial institutions and energy companies’ credit issues can take a breather for now, and stock selling from oil-producing countries can be avoided. Investors are thinking they should buy back the Japanese stock market as well.”

Alps Electric Co., which makes electrical components for Apple Inc., surged 7.7 percent for the biggest gain on the Nikkei 225 after Goldman Sachs Group Inc. said there is considerable pent-up demand for iPhones in the U.S.

Ryohin Keikaku Co. advanced 6.2 percent after operator of the Muji retail chain raised its dividend forecast for the current fiscal year. Daito Pharmaceutical Co. surged 13 percent for its biggest advance since March 2011 after posting a 15 percent increase in nine-month operating profit.

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