Japan shares rise on yen weakness
A man looks at his watch as he passes an electronic board displaying a graph of currency rates outside a brokerage in Tokyo. A man looks at his watch as he passes an electronic board displaying a graph of currency rates outside a brokerage in Tokyo.
Tokyo - Japanese shares advanced, with the Topix index rising for a second day as the yen sunk to a seven- week low against the dollar.
Dentsu Inc. jumped after boosting its profit forecast.
KDDI Corp. jumped to the highest in 13 years after Japan’s second-largest wireless carrier briefed investors on the outlook for earnings and revenue from users.
Dentsu, Japan’s No. 1 advertising agency, surged 5.4 percent to the highest since May 2006.
Sumitomo Mitsui Financial Group Inc. added 2 percent before reporting earnings today after the close.
Taiyo Yuden Co. fell 11 percent, leading declines on the Nikkei 225 Stock Average, after the electronic-component maker cut its net-income below analyst estimates.
The Topix climbed 1.7 percent to 1,205.41 at the close in Tokyo, with all 33 industry groups advancing.
The Nikkei 225 rose 2.2 percent to 14,588.68, its biggest daily gain in two months.
The yen fell against all 16 major peers and traded as low as 99.59 per dollar, the weakest since September 20.
“As well as the yen holding within the 99 per dollar range, US shares gained yesterday, indicating that overseas the environment isn’t bad,” said Toshihiko Matsuno, a strategist at Tokyo-based SMBC Friend Securities Co.
“Aside from the megabanks, most major companies have reported earnings, so we’re lacking in catalysts today.”
More than 700 Topix companies released earnings this month through yesterday, according to data compiled by Bloomberg.
Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. are scheduled to report on November 14.
Profit Forecast
Of the Topix members that have reported quarterly earnings this season and for which Bloomberg has estimates, 60 percent beat profit expectations, data compiled by Bloomberg show.
KDDI gained 5.1 percent to 5,970 yen, the highest level since May 2000.
The company expects operating earnings to rise more than 10 percent next fiscal year and for average revenue per user, a key measure of customer spending, to increase this fiscal year after a period of decline, Satoshi Tsuruta, a spokesman for KDDI, said
Dentsu gained 5.4 percent to 3,915 yen, its highest close since May 2006.
The advertising agency raised its full-year net- income forecast 73 percent to 33.1 billion yen, beating the 21.9 billion yen estimate of 11 analysts compiled by Bloomberg.
The boost to its forecast is a “positive surprise,” said JPMorgan Chase & Co. analyst Yusuke Maeda.
Sumitomo Mitsui gained 2 percent to 4,865 yen.
The lender, which is reporting first-half earnings today, may have already achieved most of its targets for the year ending March 2014, according to analysts surveyed by Bloomberg News.
Taiyo Yuden plunged 11 percent to 1,134 yen, its biggest loss since March 15, 2011.
The maker of electronic components and recording media such as CDs cut its full-year profit forecast by 31 percent, prompting Mizuho Securities to downgrade the stock to neutral from buy.
US Stocks
Futures on the Standard & Poor’s 500 Index climbed 0.1 percent.
US stocks rose yesterday, with the Dow Jones Industrial Average extending a record, as investors awaited retailer earnings reports to gauge the strength of consumer demand and the likelihood of cuts to monetary stimulus.
Canon Inc., the world’s biggest camera maker, gained 1.5 percent to 3,145 yen.
Honda Motor Co., which counts North America as its biggest market, gained 1.7 percent to 4,000 yen.
Sony Corp. jumped 3.6 percent to 1,700 yen.
Jack Tretton, president of the company’s US computer entertainment division, isaid he was confident the company can meet analysts’ estimates of 3 million PlayStation 4 console sales by year-end.
Relative Value
The Topix fell 0.7 percent this month through yesterday.
It trailed 23 other developed markets tracked by Bloomberg in October, rising less than 0.1 percent, after Prime Minister Shinzo Abe decided to implement a sales-tax increase starting in April.
The measure remains the best performer in the group this year as unprecedented monetary easing by the Bank of Japan weakened the yen, improving the profit outlook for exporters.
The Topix traded at 1.24 times book value yesterday, compared with 2.56 for the S&P 500 and 1.81 for the Stoxx Europe 600 Index yesterday.
The Japanese measure’s 30-day volatility was 16.5 today, compared with its five-year median of 19.1. - Bloomberg News