Japan Stocks Rise for Sixth Day on Weaker Yen; Sony Advances

By Masaki Kondo

Jan. 6 (Bloomberg) -- Japanese stocks rose, leading the Nikkei 225 Stock Average to its longest winning streak in 18 months, as a weaker yen improved the earnings outlook for electronics and machinery manufacturers.

Sony Corp., which gets a quarter of its sales from the U.S., gained 7.6 percent, and Komatsu Ltd., the world’s second-largest maker of earthmoving equipment, added 4.7 percent after Japan’s currency sank to a one-month low versus the dollar. NEC Electronics Corp., the nation’s third-largest chipmaker, climbed 3.4 percent after memory prices rose. Nippon Paper Group Inc. dived 8.1 percent on concern import costs will rise.

“The weaker yen helps lift exporters’ earnings, while making import bills higher for domestic-oriented companies such as papermakers and retailers,” said Mitsushige Akino, who oversees about $468 million at Tokyo-based Ichiyoshi Investment Management.

The Nikkei climbed 37.72, or 0.4 percent, to close at 9,080.84 in Tokyo, extending its gain to a sixth day, the longest winning streak since July 2007. The broader Topix index rose 0.29, or less than 0.1 percent, to 876.20, with almost the same number of stocks advancing and slumping.

The yen’s retreat may give breathing room to Japanese companies that depend on overseas sales, as the global economic slump curbs demand. Dimming earnings prospects in 2008 prompted investors to sell off electronics manufacturers, causing Sony to lose more than half its value last year.

Weaker Yen

The yen depreciated against the dollar to as much as 93.60, the weakest level since Dec. 8, from 92.03 at the 11 a.m. close of stock trading in Tokyo yesterday. The local currency strengthened to as much as 92.85 today.

Sony, the world’s second-biggest maker of consumer electronics, climbed 7.6 percent to 2,120 yen, the sharpest jump since Nov. 5. Canon Inc., which gets a third of its sales from the Americas, added 5 percent to 2,970 yen.

A 1 yen change against the dollar alters Canon’s annual operating profit by 2.6 billion yen ($28 million), the company said in October. A weaker yen increases the value of overseas sales when revenue is repatriated.

Komatsu, which makes more than 80 percent of its sales overseas, rose 4.7 percent to 1,251 yen, its highest close in almost two months. Hitachi Construction Machinery Co., Asia’s second-largest maker of earthmovers, jumped 5.6 percent to 1,156 yen, the highest close since Nov. 12. A gauge of machinery makers climbed 3 percent, the third-steepest advance of 33 industries tracked by the Topix.

Memory, TVs

Nippon Paper, Japan’s second-largest maker of the material, plunged 8.1 percent to 3,300 yen, the sharpest drop since Oct. 27. Furniture retailer Nitori Co., whose nine-month earnings were boosted by a stronger yen, sank 6.5 percent to 6,490 yen. The shares rose 31 percent last year.

NEC Electronics added 3.4 percent to 852 yen, while Elpida Memory Inc., Japan’s biggest memory-chip maker, rose 2.8 percent to 615 yen. Tokyo Electron Ltd., the world’s No. 2 maker of semiconductor equipment, climbed 5.8 percent to 3,480 yen. Prices of the benchmark dynamic random access memory chips rose 1.3 percent today, adding to yesterday’s 5.5 percent surge, according to Dramexchange Technology Inc., Asia’s biggest spot market for chips. The benchmark price fell 62 percent last year.

Nippon Electric Glass Co., the world’s third-largest maker of glass for flat-panel televisions, soared 16 percent to 579 yen, the biggest gain on the MSCI World Index, followed by Sharp Corp. The Nikkei newspaper reported today Nippon Electric Glass will spend as much as 3 billion yen to boost capacity. Sharp, Japan’s biggest maker of liquid-crystal display TVs, leapt 14 percent to 797 yen, the steepest advance since November 1999.

Solar Cells

“The report on Nippon Electric Glass’ spending plan relieved a very pessimistic view among investors regarding LCD demand,” said Ichiyoshi’s Akino. “This also helps Sharp rally today.”

Sharp, the world’s second-largest solar-battery maker, also got a boost from a separate Nikkei report today that Japan’s government aims to create 2.2 million jobs in the field of environmental technologies by 2015. GS Yuasa Corp., which will set up a venture with Honda Motor Co. to produce rechargeable batteries for hybrid vehicles, jumped 5.8 percent to 544 yen, making it the second-most actively traded stock in Tokyo.

Nikkei futures expiring in March were unchanged at 9,070 in Osaka and added 0.2 percent to 9,095 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.