Tokyo - Japanese shares rose, with the Topix index reversing yesterday’s drop, after global stocks surged on bets the European Central Bank will expand stimulus.
Toyota Motor gave the biggest support to the Topix.
Shippers jumped 4.7 percent, the most among the stock index’s industry groups, after a gauge tracking freight rates posted the largest advance since 2009.
Sony gained 3.4 percent after Third Point, the hedge-fund run by activist investor Daniel Loeb, sold its investment in the electronics maker.
The Topix jumped 2.6 percent to 1,236.41 at the close, with all 33 industry groups advancing.
The measure lost 1.6 percent yesterday after surging 4 percent on October 20.
The Nikkei 225 Stock Average increased 2.6 percent to 15,195.77 today.
US and European benchmark equity indexes gained at least 2 percent yesterday amid the ECB optimism.
“Everyone has become very sensitive to how the global economy is doing, and investors are especially swayed by news from the various authorities, as well as the macro data,” said Naoki Fujiwara, Tokyo-based chief fund manager at Shinkin Asset Management, which oversees about $6 billion (R66 billion).
“There’s no clear direction in the near term and we’ll probably see repeated risk-on, risk-off days. But domestic earnings are likely to be revised up, and the market has room to price that in.”
As the Federal Reserve winds down asset purchases, investors are looking to the ECB and Bank of Japan to bolster the outlook for the global economy.
The ECB bought Italian covered bonds as it returned to the market for a second day under its asset purchase program, according to two people familiar with the matter.
Reuters earlier reported the ECB is looking to buy corporate bonds on the secondary market amid growing concern the euro area’s economic growth is slowing.
Europe Concerns
“There are concerns about deflation in Europe and that Germany’s economy isn’t as strong, so there’s a chance the ECB will start to denote its intention to not let the economy deteriorate,” said Hiroichi Nishi, an equities manager at SMBC Nikko Securities in Tokyo.
“Japanese shares had fallen a lot because of concerns about a global economic slowdown. If these worries recede, it’s positive for Japanese stocks.”
Japan’s exports climbed the most in seven months in September, supporting a rebound in the economy as Prime Minister Shinzo Abe weighs another sales-tax increase.
Overseas shipments rose 6.9 percent from a year earlier, the finance ministry said in Tokyo today, compared with the median estimate for a 6.5 percent increase in a Bloomberg News survey of 27 economists.
Imports grew 6.2 percent, leaving a trade deficit of 958.3 billion yen ($9 billion).
Shippers Surge
Nippon Yusen, Japan’s biggest shipper by sales, rose 4.3 percent to 268 yen.
Mitsui, the No. 2, gained 5.4 percent to 333 yen, its steepest rally in a year.
Kawasaki Kisen Kaisha, the third-largest, added 5 percent to 233 yen.
The cost of shipping commodities soared amid speculation that Chinese traders are increasing purchases of iron ore, the raw material used in steel.
The Baltic Dry Index surged 12 percent, the biggest one-day gain since February 2009.
Sony jumped 3.4 percent to 1,909 yen.
Third Point said it made “nearly 20 percent” on its exited Sony investment, which was announced in May 2013, despite the Japanese company rejecting Loeb’s push that it spin out about one-fifth of its US-based entertainment business. - Bloomberg News