Japan’s Nikkei Jumps Most Since May on U.S. Homes, Commodities

By Masaki Kondo

Aug. 24 (Bloomberg) -- Japanese stocks rose, lifting the Nikkei 225 Stock Average to its biggest jump in more than three months, after sales of existing homes in the U.S. surged the most on record, the yen weakened and commodities gained.

Canon Inc., the world’s biggest digital-camera maker, added 6.3 percent. Honda Motor Co., which gets more than half its sales in North America, climbed 3.2 percent. Mitsubishi Corp., a trading company that gets more than a third of its sales from commodities, advanced 3.9 percent.

“The housing report confirmed the U.S. is clearly on a path to recovery,” said Yoshinori Nagano, a senior strategist at Tokyo-based Daiwa Asset Management Co., which oversees the equivalent of $91 billion. “The fundamentals of the global economy and corporate earnings are improving, supporting the resilience of the market.”

The Nikkei 225 Stock Average climbed 342.85, or 3.4 percent, to 10,581.05 in Tokyo, the steepest climb since May 7. The broader Topix index added 22.93, or 2.4 percent, to 970.27, with all of its 33 industry groups advancing.

Shares on the Nikkei traded at 44.6 times their estimated net income on Aug. 21, the lowest level in a month. The gauge dropped 3.4 percent last week, the first weekly decline since the five days ended July 10 as the U.S. said it would close a “cash for clunker” car-financing program and on concern China will curb bank lending, hampering growth.

In New York, the Standard & Poor’s 500 Index climbed 1.9 percent on Aug. 21 to a level not seen since Oct. 6. Purchases of existing U.S. homes jumped 7.2 percent in July, the most since the tallies began in 1999, the National Association of Realtors said. Federal Reserve Chairman Ben S. Bernanke said the global economy is “beginning to emerge” from recession.

Slowing Trading

“Japanese companies can’t count on domestic demand as a growth driver but have to rely on China and the U.S.,” said Koji Toda, chief fund manager at Resona Bank Ltd. “People’s sentiment here is easily influenced by overseas markets.”

The value of Topix-listed shares traded today fell to the lowest level since July 28.

Canon, which gets a third of its sales from the Americas, jumped 6.3 percent to 3,720 yen, while Toyota Motor Corp. rose 2.3 percent to 4,070 yen. Honda, Japan’s No. 2 automaker, gained 3.2 percent to 3,050 yen. The three stocks were the biggest contributors to the Topix’s advance.

The yen depreciated against the dollar to as much as 94.93 today from 93.77 at the close of Tokyo stock trading on Aug. 21. A weaker yen lifts the value of overseas sales at Japanese companies when converted into their home currency.

Mitsubishi, Japan’s biggest trading house by value, rose 3.9 percent to 1,914 yen. Mitsui Mining & Smelting Co., which owns a third of unlisted Pan Pacific Copper Co., Japan’s biggest smelter of the metal, surged 6 percent to 285 yen. Inpex Corp., the nation’s top oil explorer, jumped 5.4 percent to 758,000 yen.

Copper futures climbed 5.1 percent in New York on Aug. 21, the steepest gain since June 1, while oil added 1.3 percent.

Nikkei futures expiring in September rose 2.9 percent to 10,580 in Osaka and gained 3 percent to 10,580 in Singapore.

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