“Japanese shares gained, with the Topix Index (TPX) rebounding from the biggest drop in 10 months on speculation yesterday’s decline was excessive. Exporters and shippers climbed after the yen weakened.
Toyota Motor Corp., the world’s biggest carmaker, rose 1.9 percent. Kawasaki Kisen Kaisha Ltd. (9107), Japan’s third-largest shipping company by market value, rose 3.2 percent, paring yesterday’s 4.8 percent drop. Daiei Inc. (8263) tumbled 5.7 percent after surging 34 percent yesterday on a report retailer Aeon Co. may buy a stake in the department-store operator.
The Topix gained 1.7 percent to 1,045.89 at the close in Tokyo after yesterday dropping the most since May as a plan to tax Cyprus deposit holders to fund a bailout sparked concern of bank runs in the euro zone. The Nikkei 225 Stock Average rose 2 percent to 12,468.23. Volume was 36 percent below the 30-day average as Haruhi Kuroda prepares to replace Bank of Japan Governor Masaaki Shirakawa tomorrow.
“There was general panic in response to the Cypriot deal yesterday but now, after some reassessment, markets are realizing it’s a special case and so the risk of contagion is low,” said Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages $126 billion and is overweight on Japan equities. “While the BOJ leadership change has been priced into stocks in the short-term, there’s much better to come if the push to end deflation gathers momentum.”
Topix Rally
The Topix rallied 45 percent from Nov. 14, when elections were announced that brought Prime Minister Shinzo Abe to power on a platform of increased stimulus and monetary easing from the central bank. The gauge is trading at 1.2 times book value, compared with 2.2 times for the Standard & Poor’s 500 Index and 1.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg….”
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