Japan Stocks Rise on Property-Price Speculation; Toshiba Climbs

By Masaki Kondo

Sept. 7 (Bloomberg) -- Japanese stocks rose for the first time in four days as Toshiba Corp. gained on a plan to outsource some electronics production and real-estate developers climbed on speculation property prices will increase.

Toshiba, the nation’s biggest chipmaker, jumped 3.9 percent. Property developers as a group rose the most in the Topix index, with NTT Urban Development Corp. leading gains. Canon Inc., a camera maker that gets more than a quarter of its sales from the Americas, climbed 2.6 percent as the dollar strengthened against the yen. Promise Co., a consumer lender, lost 7.6 percent after Nikko Citigroup Ltd. cut its share-price estimate.

“The market is dominated by speculators and nobody has a clue how the market will look even in a week,” said Mitsushige Akino, who oversees the equivalent of $645 million at Ichiyoshi Investment Management Co. “Funds seem to be flowing into Japan’s real-estate market because properties are relatively cheap and there are signs the economy has bottomed out.”

The Nikkei 225 Stock Average rose 1 percent to 10,289.04 as of 12:43 p.m. in Tokyo. The broader Topix index added 0.8 percent to 942.75, with three stocks gaining for every two that declined. Both gauges fell for a third day on Sept. 4, the longest stretch of declines in seven weeks.

The number of shares traded on the Tokyo Stock Exchange as of the 11 a.m. break was the lowest since at least July. U.S. markets are closed today for the Labor Day holiday.

Toshiba, Real-Estate

The estimated price-earnings ratio on the Nikkei dropped to 39.5 on Sept. 4, a level not seen since July 17, as investors sold equities on concern gains had outpaced the prospects for profit growth. The gauge has rallied 44 percent in the past six months after plunging to the lowest level since October 1982.

Toshiba rose 3.9 percent to 484 yen and was the most actively traded stock by value in Japan. The company said it may contract out some production of large-scale integrated circuits. The Nikkei newspaper earlier reported Toshiba may give orders to Chartered Semiconductor Manufacturing Ltd. of Singapore or Globalfoundries Inc. of the U.S.

NTT Urban surged 6.1 percent to 93,800 yen, and market leader Mitsui Fudosan Co. leapt 3.1 percent to 1,784 yen. A gauge of property developers posted the steepest increase among the Topix’s 33 industry groups.

“Businesses are putting up good properties for sale” because of restructuring and cost cuts, said Ichiyoshi’s Akino. That’s attracting investors and may lead to higher property prices, he said.

Dollar-Yen Rate

Canon, the world’s biggest maker of digital cameras, climbed 2.6 percent to 3,560 yen and was the single biggest contributor to the Topix’s advance. Sony Corp., the maker of the PlayStation 3 game machine, advanced 1.9 percent to 2,470 yen.

Electronics makers were buoyed by the stronger dollar, which boosts the value of overseas sales at Japanese companies when converted into their home currency. The dollar appreciated to as much as 93.20 yen today from 92.61 at the close of Tokyo stock trading on Sept. 4.

Promise, the consumer lender, lost 7.6 percent to 754 yen, set for the lowest close since its listing in December 1994. Nikko Citigroup slashed its price estimate by almost a fifth to 690 yen and kept its “sell” rating.

Nikkei futures expiring in September added 1 percent to 10,290 in both Osaka and Singapore.

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