BLBG: Australian, N.Z. Dollars Head for Weekly Loss on Stock Slide
Japanese stocks soared, sending the Topix index up the most in 12 weeks, on expectations government and central bank measures will benefit companies short on funding, and as U.S. data eased concern consumer spending will worsen.
Sumitomo Realty & Development Co. soared 9.7 percent after the Trade Ministry revealed a proposal to purchase stakes in businesses and the Bank of Japan signaled it will focus on lowering borrowing costs. Honda Motor Co., which gets more than half its profit in North America, leapt 9.3 percent after the U.S. Conference Board’s index of leading indicators unexpectedly rose. Kawasaki Kisen Kaisha Ltd. surged 10 percent after commodity shipping fees rose for a fifth day.
The Nikkei 225 Stock Average soared 378.93, or 4.9 percent, to close at 8,061.07 in Tokyo, its first gain in three days. The broader Topix index rose 37.21, or 4.8 percent, to 805.49, the sharpest gain since Nov. 5.
“Thanks to once-in-a-century measures from governments worldwide, the global economy will likely be better next year than this year,” said Yoshinori Nagano, a senior strategist at Tokyo-based Daiwa Asset Management Co., which oversees about $96 billion. “The market is starting to reflect that possible recovery.”
The Nikkei sank by a record 42 percent last year as bankruptcies among the nation’s listed companies reached the highest level since World War II, according to Tokyo Shoko Research Ltd. Most of those were in the real estate industry as global credit turmoil prompted banks to tighten lending.
The tumble in shares has driven up the average dividend yield on the Nikkei’s members to 2.79 percent as of yesterday, more than twice the returns on 10-year Japanese government bonds.
The Trade Ministry today said it will propose a plan for the government-backed Development Bank of Japan to buy stocks in companies. Separately, Bank of Japan board members said the central bank should consider taking steps “that would have stronger downward impact” on interest rates on corporate debt, minutes of the Dec. 18-19 meeting showed today.
