BLBG: Japanese Stocks Surge on Government Support Hopes, U.S. Sales
Japanese stocks jumped, lifting the Topix from the lowest in a quarter century, on speculation the government will buy shares and that better-than-expected U.S. retail sales heralds a rebound in the world’s biggest economy.
Mitsubishi UFJ Financial Group Inc., Japan’s No. 1 listed bank, gained 5.6 percent after the Nikkei newspaper said the government is considering purchasing shares on the open market to prop up prices. Inpex Corp., Japan’s biggest oil explorer, climbed 4.5 percent after crude surged yesterday. Olympus Corp., a maker of digital cameras and endoscopes, surged 9.1 percent.
“We are looking for a rally by the end of the year,” John Vail, head of global strategy in Tokyo at Nikko Asset Management Co., which manages $93 billion in assets globally, said in an interview with Bloomberg Television. If the government broadens its efforts “into buying stocks from the general market, that would help the market a great deal.”
The Nikkei 225 Stock Average soared 365.12, or 5.1 percent, to 7,563.37 as of 12:58 p.m. in Tokyo, the sharpest jump since Dec. 15. The broader Topix index added 23.06, or 3.3 percent, to 723.99, after slumping to the lowest level since December 1983 yesterday. For the week, the Nikkei headed for a 5.4 percent jump, the best since the period ended Nov. 28. The Topix was set for a 0.4 percent advance.
The Standard & Poor’s 500 Index soared 4.1 percent in New York, capping a three-day, 11 percent advance. Bank of America Corp. followed Citigroup Inc. and JPMorgan Chase & Co. in saying it was profitable in the first two months of 2009.
Share Purchase Report
“Nervousness about the stability of the financial system has been behind recent declines, and the retreat of those fears is a definite plus,” Kazuhito Suzuki, a strategist in Tokyo at Shinkin Asset Management Co., which oversees about $6.1 billion, said in an interview with Bloomberg Television. “The outlook today is bullish.”
Japan’s government is considering using zero-coupon bonds to fund exchange-traded fund purchases as it works to shore up the stock market, the Nikkei newspaper reported. The move would allow retail investors to convert the bonds into stocks should the market rise, according to the report. The Japan Business Federation, or Keidanren, proposed the ETF scheme on March 9.
Mitsubishi UFJ jumped 5.6 percent to 418 yen. Sumitomo Mitsui Financial Group Inc., Japan’s No. 3 bank by assets, added 5.6 percent to 2,830 yen. Regional lender Bank of Yokohama Ltd. advanced 4.9 percent to 409 yen.
Retail Sales
Olympus rose 9.1 percent to 1,447 yen. Kyocera Corp., the world’s biggest maker of ceramic packaging for chips, gained 5.3 percent to 6,330 yen. Pioneer Corp., Japan’s No. 3 audio-visual equipment maker, advanced 5.8 percent to 92 yen.
U.S. retail purchases decreased by 0.1 percent in February, while economists had forecast a 0.5 percent drop. January’s numbers were revised higher. Inventories also declined, indicating manufacturers may need to revive some production later this year.
Inpex added 4.5 percent to 680,000 yen. Mitsubishi Corp., Japan’s largest trading company and which generates more than half of its profit from commodities, rose 3.1 percent to 1,140 yen.
Crude oil for April delivery rose 11 percent to $47.03 a barrel in New York, the biggest gain since Feb. 19. The contract surged ahead of a meeting by OPEC this weekend where production may be cut for a fourth time.
Sony Corp. climbed 7.7 percent to 1,868 yen, while Seiko Epson Corp. jumped 8.3 percent to 1,210 yen. Sony, the world’s No. 2 maker of consumer electronics will buy equipment for manufacturing liquid-crystal displays from Seiko Epson as part of an alliance, the companies said yesterday. On March 11, Seiko Epson widened its net loss forecast for the current year due to restructuring charges at its flat-panel division.
Ubiquitous Energy Inc., which specializes in “esco” projects designed to save companies money by boosting the energy efficiency of buildings and factories, doubled on its trading debut to 1,996 yen. It was Japan’s second new listing this year.
Resona Holdings Inc., the nation’s No. 4 listed bank, slumped 4.5 percent to 1,369 yen. Kristine Li, an analyst at KBC Securities Japan, downgraded the stock to “sell” from “hold,” citing the recent jump in the shares due to a stock buyback program.
