By Masaki Kondo and Satoshi Kawano
Feb. 27 (Bloomberg) -- Japanese stocks rose, heading for a weekly gain, as a factory output report stoked speculation steelmakers will be able to ramp up production.
JFE Holdings Inc., Asia’s second-largest steelmaker, climbed 5.7 percent after a government report showed manufacturers expect production will rebound in March. Game maker Nintendo Co. added 2.3 percent in Osaka trading after the weaker local currency boosted its earnings outlook. Asahi Glass Co. and Nippon Electric Glass Co. dropped at least 4.6 percent after Credit Suisse Group AG cut their ratings.
“The government report confirmed manufacturers cut output and reduced inventory to match demand,” said Hiroaki Osakabe, a fund manager at Chiba-Gin Asset Management Co., which oversees the equivalent of $1 billion in Tokyo. “This is a tailwind for manufacturers and steelmakers.”
The Nikkei 225 Stock Average rose 87.70, or 1.2 percent, to 7,545.63 as of 12:43 p.m. in Tokyo. The broader Topix index added 9.21, or 1.2 percent, to 751.74. The Nikkei is set for a 1.7 percent gain on the week and a 5.7 percent tumble in February. The Topix has gained 1.7 percent in its first weekly advance in four, and lost 5.3 percent in the month.
The daily value of stocks traded in Tokyo has stayed below the 12-month average since Jan. 7. As of yesterday, Nikkei members traded at an average 71 times estimated net income for this year, the highest level since May 2003, as companies cut profit forecasts faster than share prices declined.
Japanese Finance Minister Kaoru Yosano said yesterday he’s ordered a study into ways to bolster the nation’s stocks, moving the government closer to buying equities. The Nikkei touched a 26-year low this week as the world’s second-largest economy heads for its worst postwar recession.
Factory Output
Japan’s Trade Ministry today said businesses expect production will rebound 2.8 percent in March after falling 8.3 percent this month. Factory output dropped by a record 10 percent in January from the previous month, the ministry said.
JFE surged 5.7 percent to 2,120 yen, while Nippon Steel Corp., the world’s No. 2 producer of the alloy, climbed 3.6 percent to 260 yen. Kobe Steel Ltd. added 3.5 percent to 118 yen.
Kubota Corp., Asia’s biggest tractor maker, fell 4.5 percent to 466 yen after its president said the company may have to trim its dividend next fiscal year owing to “astonishingly bad” profit. Kubota was the fourth-biggest loser on the Nikkei.
Nintendo, which sells four times more Wii game machines in the Americas than in Japan, climbed 2.3 percent to 28,200 yen in Osaka. Canon Inc., the world’s No. 1 digital-camera maker, added 2.2 percent to 2,505 yen, and Fanuc Ltd., the biggest maker of industrial robots globally, rose 2.2 percent to 6,470 yen.
The yen depreciated to as much as 98.71 yesterday, the weakest level since Nov. 10, from 97.80 at the close of stock trading in Tokyo yesterday. A weaker yen boosts the value of repatriated overseas sales for Japanese companies.
Asahi Glass
Asahi Glass, Asia’s largest glassmaker, sank 4.6 percent to 434 yen, while Nippon Electric Glass dived 6 percent to 642 yen. Credit Suisse lowered its ratings on the companies to “underperform” from “neutral.”
Nikkei futures expiring in March added 1.5 percent to 7,540 in Osaka and gained 1.4 percent to 7,545 in Singapore.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.
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