Japanese Stocks Advance, Boosting Topix to Its Best First Week in 15 Years

Japanese stocks climbed, boosting the Topix index to its best first week in 15 years, as carmakers rose on speculation U.S. demand will expand and employment will improve in the world’s largest economy.

Toyota Motor Corp., the world’s No. 1 carmaker, rose 2.2 percent and Bridgestone Corp., the world’s largest tiremaker, jumped 2.6 percent after PricewaterhouseCoopers LLP said car assembly in North America may increase 5 percent this year. Inpex Corp., Japan’s largest oil and gas explorer, sank 1.7 percent and Mitsubishi Corp., the country’s biggest commodities trader, lost 1 percent after crude and metal prices fell. Resona Holdings Inc., Japan’s fourth-largest bank by market value, slumped 4 percent after a report of a share sale.

“Investors can’t find convincing factors either to buy or sell stocks,” said Ayako Sera, a strategist in Tokyo at Sumitomo Trust & Banking Co., which manages about $310 billion. “Investors need a push to buy shares and that might be the coming U.S. jobs data.”

The Nikkei 225 Stock Average climbed 0.1 percent to 10,541.04 at the close in Tokyo, after falling as much as 0.3 percent. The broader Topix advanced 0.2 percent to 926.42. The Topix gained 3.1 percent this week, its best yearly start since 1996. The Nikkei also rose 3.1 percent.

Economists expect a U.S. Labor Department report today to show employment improved in December in the world’s largest economy.

Carmakers Gain

Carmakers were the biggest support to the Topix. Toyota gained 2.2 percent to 3,455 yen, contributing the most to the Topix’s gain. Nissan Motor Co., Japan’s third-largest automaker, jumped 4.4 percent to 861 yen.

Bridgestone, a tiremaker that gets more than 40 percent revenue from the Americas, gained 2.6 percent to 1,643 yen and its smaller rival Sumitomo Rubber Industries Ltd. climbed 0.9 percent to 867 yen. Rubber-products makers had the largest advance among the Topix’s 33 industry groups.

Automobile assembly in North America may increase 5 percent this year to 12.6 million vehicles, Anthony Pratt, automotive senior analyst of PricewaterhouseCoopers’s Autofacts team, yesterday said in a presentation in Detroit.

Inpex and Japan Petroleum Exploration Co., the nation’s second-largest oil explorer, both slumped 1.7 percent. Oil companies had the biggest drop in the Topix’s 33 industry groups.

Commodity Prices Drop

Mitsubishi, which gets about 40 percent of its sales from metals and energy, lost 1 percent to 2,349 yen. Mitsui & Co., a trading house that counts commodities as its biggest source of profit, fell 0.7 percent to 1,417 yen.

Crude oil for February delivery declined 2.1 percent to $88.38 a barrel in New York yesterday. The London Metal Exchange Index of six metals including copper and aluminum dropped 0.2 percent yesterday, falling for a second day. Gold futures for February delivery declined for the third straight day yesterday.

The Topix and Nikkei 225 yesterday both closed at their highest levels since May, with gains of about 15 percent in a rally that began Nov. 1. Stocks in the Topix were valued at 15.9 times estimated earnings on average at yesterday’s close, compared with 13.5 times for the Standard & Poor’s 500 Index and 11.1 times for the Stoxx Europe 600 Index.

The 25-day Toraku index, a measure of daily stock winners and losers in Tokyo, reached 141 yesterday, the highest reading since Dec. 22. A level of more than 120 suggests to some investors the market is overheating.

“Investors are getting concerned about overheating in the short-term,” said Juichi Wako, a senior strategist at Tokyo- based Nomura Holdings Inc. “Investors will likely be in a wait- and-see stance ahead of the jobs data.”

Resona dropped 4 percent to 523 yen. The lender confirmed, after trading closed, report that it will raise as much as 575 billion yen ($6.9 billion) selling shares in a global public offering this month to repay government bailout funds.

To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.