Japan Stocks Rise Amid Stimulus Report as Exporters Gain on Yen

Updated on
  • Government considering 20 trillion yen stimulus, Kyodo says
  • Yen trades near weakest level in six weeks against the dollar

Shares in Tokyo rose, with the benchmark equity index closing at a six-week high, as the yen’s slide boosted exporters amid expectations for a Japanese government stimulus package.

The Topix gained 0.7 percent to 1,339.39, its highest level since June 8. The yen was at 107.20 per dollar on Thursday after sliding 0.7 percent the previous day. Prime Minister Shinzo Abe’s government is considering 20 trillion yen ($187 billion) in fiscal stimulus, almost double its previous plan, to counter the possible effects of the U.K.’s decision to leave the European Union, Kyodo News reported, citing people close to the matter.

“The current situation is good for stocks,” said Mitsushige Akino, a Tokyo-based executive officer at Ichiyoshi Asset Management Co. “With the yen back at 107 to the dollar, I expect Japanese stocks to do well. The U.S. economy is good, and there’s hope for policy measures in Japan too.”

The Nikkei 225 Stock Average added 0.8 percent on Thursday. Futures on the S&P 500 Index rose 0.1 percent after the underlying measure climbed 0.4 percent on Wednesday, with earnings seasons so far delivering more positive surprises than negative ones. The Bloomberg Dollar Spot Index held near its highest since May as speculation grew the U.S. will hike interest rates this year.

Car manufacturers and electric-appliance makers were the biggest boosts to the Topix, with almost twice the number of shares rising as falling.

  • Nintendo Co. climbed 0.9 percent on Thursday after falling the most in five years yesterday. The stock has risen 95 percent since releasing the Pokemon Go mobile app on July 6 after the game became an instant hit.
  • McDonald’s Holdings Co. (Japan) lost 1.1 percent after surging 22 percent in the past four days. The fast-food chain operator said it will collaborate with Nintendo on the Pokemon Go game.
  • Mitsumi Electric Co. advanced the most on the Nikkei 225, adding 14 percent and leading gains in electric-appliance manufacturers.
  • Slot-machine makers Universal Entertainment Corp. and Oizumi Corp. both surged 19 percent. Game machine stocks soared on speculation the government may include casino-related policies as part of its stimulus package, Daiwa Securities Group Inc. analyst Yusuke Miura said.

The Topix rallied 8.9 percent last week, its best performance since 2009, after Prime Minister Abe’s win in the upper-house elections raised optimism the government will act to boost growth. The measure trades at 13.8 times estimated earnings, compared with 18.5 times for the S&P 500 and a multiple of 16 for Europe’s Stoxx 600 Index.

“U.S. shares are also climbing, and with the economy looking a little brighter the yen is weakening,” said Masakuni Fujiwara, chief executive officer at VistaMax Fund Advisors Ltd. in Tokyo. With additional hopes for both domestic monetary and fiscal stimulus, “these are all combining to push up Japanese stocks,” he said.