Japanese Stocks Rise on Ratings, Yen; Asahi Glass Advances

Feb. 16 (Bloomberg) -- Japan’s Topix index rose for an eighth day, extending its longest winning streak in 18 months, after brokerages raised investment recommendations on some companies and as the yen weakened.

Toshiba Corp., a nuclear power-plant maker, and Asahi Glass Co. advanced at least 2.3 percent after brokerages increased their ratings on the companies. Fanuc Corp., an industrial-robot manufacturer that gets almost 80 percent of its sales overseas, increased 0.7 percent. Daihatsu Motor Co., a minicar maker, gained 1.7 percent after the Nikkei newspaper said the company plans to build a small-car factory in Indonesia.

The Nikkei 225 Stock Average rose 0.5 percent to 10,794.69 as of 10:03 a.m. in Tokyo. The broader Topix index gained 0.5 percent to 967.86 with eight stocks advancing for every five that retreated. The Topix’s eight-day advance was the longest winning streak since a 13-day run that ended Aug. 4, 2009.

“There’s strong buying interest in the market,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.

The Topix gained 7.1 percent this year to yesterday. That has driven the average price of stocks in the gauge to 16.4 times estimated earnings, the highest level since July.

Toshiba advanced 2.3 percent to 544 yen after the company’s rating was raised to “outperform” from “neutral” at Nikko Cordial Securities Inc., and Asahi Glass climbed 2.6 percent to 1,142 yen following a rating upgrade by Goldman Sachs Group Inc. to “neutral” from “sell.” Kobe Steel Ltd., Japan’s fourth-largest steelmaker, gained 1.3 percent to 238 yen as the company had its rating increased to “buy” from “hold” at Citigroup Global Markets Japan Inc.

Yen Weakens

Fanuc gained 0.7 percent to 12,710 yen. Toyota Motor Corp., the world’s largest carmaker, rose 0.5 percent to 3,930 yen. Pioneer Corp., a maker of car-navigation systems and audio equipment, jumped 3.1 percent to 430 yen.

The yen depreciated to as low as 83.84 against the dollar today, compared with 83.46 at the close of stock trading in Tokyo. Against the euro, Japan’s currency weakened to 113.36 from 112.87. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.

Daihatsu Motor rose 1.7 percent to 1,324 yen. The company will invest 20 billion yen for a small-car plant in Indonesia that will start production in 2013 and eventually supply 70 percent of its output to Toyota Motor Corp., the Nikkei newspaper reported.

Domestic-oriented shares, including real estate developers and banks, extended advances after the Bank of Japan yesterday raised its economic assessment for the first time in nine months. Nomura Research Institute said in a report dated Feb. 14 that Japan will “break out of its current lull” in the first half of 2011, instead of its earlier prediction of the second half.

Developers had the largest gain among the 33 industry groups in the Topix. Mitsui Fudosan Co., Japan’s biggest developer, climbed 1.8 percent to 1,737 yen. Mitsubishi Estate Co., the No. 2　developer, jumped 3.6 percent to 1,715 yen.

Banks were the biggest contributors to the Topix’s advance. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, rallied 1.3 percent to 473 yen and Sumitomo Mitsui Financial Group Inc., the No.2, rose 2 percent to 3,130 yen.