By Masaki Kondo
March 27 (Bloomberg) -- Japanese stocks rose, driving the Topix index toward its best week in more than 16 years, as better-than-expected earnings at U.S. companies boosted speculation the global recession is abating.
Canon Inc., the world’s biggest digital-camera maker, gained 5.9 percent after U.S. electronics retailer Best Buy Co. reported earnings that topped analysts’ estimates. Nomura Real Estate Office Fund Inc. advanced 7.7 percent on a newspaper report the government may buy properties from real estate investment trusts. Nippon Yusen K.K. sent shipping lines lower after reporting an 88 percent tumble in profit.
“U.S. consumer spending appears to be picking up,” Mitsushige Akino, who oversees the equivalent of $615 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television. “The market will remain resilient, though technical indicators indicate it is overheating.”
The Nikkei 225 Stock Average climbed 165.68, or 1.9 percent, to 8,802.01 as of 10:34 a.m. in Tokyo. The broader Topix index rose 14.50, or 1.8 percent, to 841.31. The Nikkei is set for an 11 percent gain this week, while the Topix is poised to add 10 percent, the most since August 1992.
The Nikkei is en route for a 16 percent advance in March for the steepest monthly leap since January 1994. The gauge’s members traded at 97.3 times their estimated net income for this fiscal year, the highest since May 2003, according to Nikkei Inc.
Earnings Surprise
In New York, the Standard & Poor’s 500 Index climbed 2.3 percent, after Best Buy, the largest U.S. electronics retailer, yesterday reported fourth-quarter earnings that were 15 percent higher than what analysts had anticipated. ConAgra Foods Inc., the maker of Banquet frozen dinners, also beat analyst estimates as material costs fell.
Canon, which earns a third of its sales from the Americas, jumped 5.9 percent to 3,140 yen, while Sony Corp., the world’s second-biggest maker of consumer electronics, added 3.2 percent to 2,285 yen. Sharp Corp., maker of Aquos-brand televisions, climbed 4.8 percent to 878 yen.
Elpida Memory Inc., Japan’s top maker of computer-memory chips, leapt 8.7 percent to 714 yen. NEC Electronics Corp., No. 3, added 3.3 percent to 680 yen. Prices for the benchmark 1- gigabit memory chip soared 14 percent yesterday, the most since Feb. 2, according to Taipei-based Dramexchange Technology Inc., operator of Asia’s biggest spot market for chips.
Nomura Real Estate Office Fund rose 7.7 percent to 561,000 yen, and Orix JREIT Inc. added 5.5 percent to 383,000 yen. Mitsui Fudosan Co., the nation’s biggest property developer, advanced 5.1 percent to 1,248 yen, while Orix Corp., which develops real estate and provides corporate loans, climbed 9.1 percent to 4,070 yen.
REIT Support
Japan’s ruling coalition is studying the creation of a 1 trillion yen ($10.2 billion) fund to buy property from real estate investment trusts, the Nikkei newspaper reported today, without saying where it got the information. The Tokyo Stock Exchange REIT Index, which tracks 40 such funds, has fallen 43 percent in the past year as tighter bank lending contributed to a series of bankruptcies in the real estate sector.
Nippon Yusen, the nation’s No. 1 shipping line, sank 1.9 percent to 423 yen, leading its peers to the biggest decline among 33 industry groups on the Topix. Net income for the 12 months to March 31 has dropped to a 10th of the year-ago level, a preliminary earnings statement from the company showed yesterday. Nikko Citigroup Ltd. recommended selling the stock.
Nikkei futures expiring in June added 0.8 percent to 8,780 in Osaka and gained 0.7 percent to 8,775 in Singapore.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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