Japan Stocks Rise as Leasing Shares Climb on Abe’s Plan

Japan's Topix Index (TPX) closed at its highest since August 2008, led by leasing companies on a report Prime Minister Shinzo Abe will encourage the practice as part of his growth strategy.

Orix Corp. (8591), which provides leasing and loans, jumped 9.2 percent. Mizuno Corp. soared 18 percent after the sportswear company more than doubled its net-income forecast. A gauge tracking agricultural stocks climbed to the highest since 2008 on a separate report that Abe plans to double the industry's income in a decade. Sony Corp. (6758) dropped 1.7 percent after Japan's biggest exporter of consumer electronics surged 19 percent over the past five trading days.

The Topix added 0.6 percent to close at 1,253.24 in Tokyo, the highest since Aug. 29, 2008, after falling as much as 0.7 percent. The gauge capped a 3.5 percent gain this week. The Nikkei 225 Stock Average rose 0.7 percent to 15,138.12 today. Gains were limited amid signs the market may be overheating.

"Leasing companies continue to draw attention as they surge on a report about the government's growth strategy," said Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co., which oversees about 3.4 trillion yen ($33 billion). "The market is trading in a tight range as profit-taking takes place while investors buy on dips."

The Topix has risen 46 percent this year, outperforming all major equity indexes amid unprecedented easing from the Bank of Japan. The gauge traded at 1.3 times book value, compared with about 2.4 for the Standard & Poor's 500 Index and 1.7 for the Stoxx Europe 600 Index.

Abe Strategy

Abe will encourage leasing to revive capital spending to a level last seen before the collapse of Lehman Brothers Holdings Inc., the Nikkei newspaper said without citing anyone. The prime minister will outline a growth plan in a speech today after the market close.

Orix jumped 9.2 percent to 1,638 yen. Mitsubishi UFJ Lease & Finance Co. surged 17 percent to 597 yen.

Abe's growth strategies will also include boosting the agricultural industry and tripling infrastructure exports to about 30 trillion yen by 2020, public broadcaster NHK reported.

The Topix Fishery, Agriculture & Forestry Index rose 3.5 percent, the biggest gain since Feb. 26. Nippon Suisan Kaisha Ltd., a maker of seafood products, added 6.3 percent to 219 yen. Sakata Seed Corp. gained 6.1 percent to 1,530 yen.

Investors are more confident in a Japanese leader than at any time since at least September 2010. Abe's policies are perceived more optimistically than those of his counterparts in the U.S., Europe and China, according to a worldwide poll of investors, analysts and traders who are Bloomberg subscribers.

Overheating Signs

Shares opened lower today after the 14-day relative strength index, a measure of trading momentum, held above 70 for both the Topix and the Nikkei 225 for the past six days. That's a level some traders say signals a sell-off.

Sony slid 1.7 percent to 2,046 yen after its 14-day RSI climbed to 81 yesterday.

Futures on the S&P 500 added 0.2 percent today. The equity gauge fell 0.5 percent in New York yesterday, halting four days of record gains. A report showed jobless claims jumped by 32,000 to 360,000 last week, the most since the end of March. Housing starts slumped 16.5 percent in April, the most since February 2011.

Of the 803 companies on the Topix that have reported full-year earnings since April 1, and for which Bloomberg has estimates, 482 beat analysts' projections.

Mizuno soared 18 percent to 505 yen, the biggest gain since 1999, after saying net income will more than double to 4.2 billion yen in the current fiscal year.

The Nikkei Stock Average Volatility Index fell 0.5 percent to 26.53, indicating traders expect a swing of about 7.6 percent on the benchmark gauge during the next 30 days.