Japanese Stocks Rise on Earnings Reports, Drop in Unemployment

By Akiko Ikeda and Toshiro Hasegawa

Oct. 30 (Bloomberg) -- Japanese stocks rose for the first time in four days after earnings from Sharp Corp. to Takeda Pharmaceutical Co. exceeded estimates and a report showed the unemployment rate unexpectedly declined.

Olympus Corp., a maker of endoscopes, jumped 9.2 percent following a report by Nikkei English News saying the company may report higher-than-forecast operating profit and after Bank of America Corp.’s Merrill Lynch unit boosted its investment rating. Sharp, Japan’s largest maker of liquid-crystal displays, climbed 2.5 percent after the company reported a narrower loss than estimated by analysts. Takeda rallied 3.4 percent after Asia’s biggest drugmaker said profit more than doubled.

“I see many positive surprises and many companies are likely to raise profit forecasts,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “A gradual recovery will continue in the October-December period.”

The Nikkei 225 Stock Average rose 1.5 percent to 10,034.74 at the market close in Tokyo. The broader Topix index added 1.4 percent to 894.67, with more than two stocks advancing as declining. The broad gauge sank 1.7 percent this month and has increased 4.1 percent this year.

Japan’s unemployment rate declined to 5.3 percent in September from 5.5 percent in August, the statistics bureau said today in Tokyo. The median estimate of 29 economists surveyed by Bloomberg was for the rate to increase to 5.6 percent and only one person predicted a drop.

Global Rally

Stocks in Asia extended a rally yesterday in the U.S. The Standard & Poor’s 500 Index jumped 2.3 percent, the largest advance since July 23, after the Commerce Department said gross domestic product grew at a 3.5 percent pace from July through September, faster than estimated by economists surveyed by Bloomberg, after shrinking for four straight quarters.

“That’s boosting stocks, especially exporters, which are sensitive to economic trends,” said Naoteru Teraoka, who helps oversee about $16 billion at Chuo Mitsui Asset Management Co.

Olympus, which earns about 65 percent of its sales abroad, surged 9.2 percent to 2,900 yen, its highest in a year and the largest gain on the Nikkei 225. The company may report April- September operating profit of 28 billion yen ($306 million), 47 percent more than its forecast, Nikkei English News said.

Sharp climbed 2.5 percent to 991 yen after the company reported a net loss of 17.7 billion yen in the six months ended Sept. 30, narrower than the 19 billion yen deficit expected based on the median of five analyst estimates compiled by Bloomberg. That’s still wider than the 15 billion-yen shortfall projected by the company.

Nikon, Sony, Canon

Nikon Corp. increased 3.8 percent to 1,734 yen. The second- biggest maker of cameras used by professionals narrowed its forecast for a full-year net loss by 25 percent on the outlook for increased exports.

Sony Corp., which reported results at today’s market close, increased 2.8 percent to 2,785 yen, the highest in a year. Canon Inc. added 1.7 percent. The Topix industry group that includes Olympus and Nikon climbed the most among the index’s 33 sectors, and the group that includes Sharp, Sony and Canon was the biggest contributor to the gauge in terms of index points.

Today was the busiest day in Japan’s earnings season, with 336 companies listed on the Tokyo Stock Exchange scheduled to report results.

Takeda Pharmaceutical leapt 3.4 percent to 3,650 yen, rising the most in five months. Asia’s biggest drugmaker said first-half net income more than doubled to 189.6 billion yen, exceeding the median estimate of 162.4 billion yen from a Bloomberg survey of four analysts. The company said cost cuts contributed to the profit.

Nintendo Declines

Among stocks that declined, Nintendo Co., the world’s largest maker of video-game machines, sank 3.6 percent to 23,180 yen in Osaka, the steepest drop this month. The company slashed its full-year net income forecast by 23 percent after price cuts in the flagship Wii game console failed to boost demand. Nintendo was the biggest single drag on the Topix and the most- actively traded stock in Japan, followed by Sony.

Japan’s consumer prices excluding fresh food slid at a near-record pace of 2.3 percent in September from a year earlier after dropping an unprecedented 2.4 percent in August, the statistics bureau said today in Tokyo.

Sumitomo Trust & Banking Co., which plans to merge with smaller rival Chuo Mitsui Trust Holdings Inc., tumbled 6.2 percent to 487 yen, the biggest drop on the Nikkei 225. The lender’s first-half net income declined 33 percent on shrinking loan-interest income.

To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.