By Patrick Rial
April 9 (Bloomberg) -- Japanese stocks advanced, with the Nikkei 225 Stock Average closing at its highest in six weeks.
Toyota Motor Corp. paced gains after the yen weakened against the dollar and the U.S. unemployment rate unexpectedly dropped, boosting confidence exporters will be able to increase sales in the world's largest economy.
``The employment data was good news for exporters because it provided evidence that the fundamentals of the U.S. economy are stable,'' said Hideyuki Ookoshi, who oversees $365 million at Chiba-Gin Asset Management Co. in Tokyo. ``If the yen continues to trade around its current level that will be positive for companies here.''
The Nikkei 225 rose 258.98, or 1.5 percent, to 17,743.76 in Tokyo, the highest close since Feb. 27. The broader Topix index advanced 21.02, or 1.2 percent, to 1738.10. Electronics companies and automakers accounted for 37 percent of the Topix's gain. A measure of steelmakers was the only one of the 33 industry groups included in the benchmark to fall.
Toyota, the world's largest automaker by value, advanced 140 yen, or 1.9 percent, to 7,540. Sony Corp., the maker of the PlayStation 3 game console, climbed 240 yen, or 3.9 percent, to 6,440, its biggest gain since March 6. Komatsu Ltd., the world's second-largest maker of construction machinery, jumped 105 yen, or 4.3 percent, to 2,570.
The yen weakened to 119.26 against the dollar on April 6, the lowest since Feb. 26. Japan's currency fell to a record intra-day low of 159.69 versus the euro. A weaker yen increases the value of Japanese exporters' foreign dollar and euro- denominated sales when converted back into yen, while their products become more competitive abroad.
The yen recently changed hands at 119.33 per dollar and 159.39 to the euro.
More U.S. Jobs
U.S. unemployment fell to 4.4 percent last month, the Labor Department said on April 6. That matched a five-year low in October. The median estimate of 73 economists surveyed by Bloomberg was for the rate to climb to 4.6 percent from 4.5 percent. Additionally, 180,000 new jobs were created in March, more than the forecast increase of 130,000.
``This should be a favorable week for stocks after the firm employment data from the U.S. and the yen fell to the 119 range against the dollar,'' said Chisato Haganuma, a strategist at Nomura Securities Co. in Tokyo.
Adding to gains, Masatoshi Kikuchi, chief equity strategist at Merrill Lynch & Co. in Tokyo, wrote in a note to clients dated April 6 that technology shares may outperform the Topix this year on expectations of consolidation in the industry.
Rates Rising
Ship owners advanced on speculation profit will increase after freight prices climbed. Kawasaki Kisen Kaisha Ltd., Japan's No. 3 shipping line, soared 69 yen, or 6.1 percent, to 1,196. Mitsui O.S.K. Lines Ltd., the second biggest, surged 61 yen, or 4.7 percent, to 1,353. A measure including shipping lines climbed 4.5 percent, the largest percentage gain among Topix industry groups.
The Baltic Dry Index, a measure of rates for transporting dry-bulk goods across a range of ship sizes and routes, rose 0.8 percent to 5532 on April 5, the highest since Dec. 14, 2004. The measure has dropped on only three of the last 34 trading days.
Companies that make environmentally friendly goods rose on speculation demand from China, the world's fastest growing major economy, will boost sales.
Ebara Corp., a maker of waste treatment facilities and other environmental technologies, jumped 43 yen, or 6.7 percent, to 685. That was the largest percentage move among 1,889 stocks globally in the Morgan Stanley Capital International World Index. Mitsubishi Kakoki Kaisha Ltd., which also builds sewage plants, surged 44 yen, or 11 percent, to 439.
Environmental Assistance?
Chinese Premier Wen Jiabao will arrive in Japan on April 11. China will express its intention to participate actively in negotiations to reduce greenhouse gas emissions from 2013 in a joint statement after the Japan-China summit this week, the Yomiuri newspaper said on April 7.
``The Chinese premier will visit Japan this week and there are expectations he will ask for help on solving the country's environmental problems,'' said Masayoshi Okamoto, a strategist at Jujiya Securities Co. in Tokyo. ``Ebara has become the big hit among environment-related stocks.''
Pentax Corp. advanced 67 yen, or 9.1 percent, to 800. Hoya Corp., Japan's largest optical glassmaker, said on April 6 it offered to pay about 770 yen for each share of Pentax, an increase from an earlier offer valued at about 648 yen a share. Meanwhile, some board members at the camera maker opposed a merger agreement with Hoya, Pentax said yesterday. Hoya added 40 yen, or 1 percent, to 4,140.
KDDI Corp. rose 34,000 yen, or 3.5 percent, to 1.01 million, a seven-year high. Japan's second-biggest mobile phone operator added a monthly record 530,000 customers in March, more than the combined additions of its competitors.
NTT DoCoMo Inc., the nation's largest mobile phone operator, fell 1,000 yen, or 0.5 percent, to 215,000. Softbank Corp., the No. 3, dropped 80 yen, or 2.8 percent, to 2,815. DoCoMo added 298,000 subscribers, while Softbank expanded by 127,600 users.
``Right now, KDDI is the clear winner in the number portability fight,'' said Jujiya's Okamoto.
Ebara Corp. (6361 JT)
Hoya Corp. (7741 JT)
Isuzu Motors Ltd. (7202 JT)
Kawasaki Kisen Kaisha Ltd. (9107 JT)
KDDI Corp. (9433 JT)
Komatsu Ltd. (6301 JT)
Mitsubishi Kakoki Kaisha Ltd. (6331 JT)
Mitsui O.S.K. Lines Ltd. (9104 JT)
NTT DoCoMo Inc. (9437 JT)
Pentax Corp. (7750 JT)
Softbank Corp. (9984 JT)
Sony Corp. (6758 JT)
Toyota Motor Corp. (7203 JT)
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net .
Last Updated: April 9, 2007 02:33 EDT
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