Japan's Nikkei 225 Stock Average rose the most in five months after the nation's currency fell to a four-week low versus the dollar and the government pledged to ask Group of Seven officials to support a weaker yen.
Honda Motor Co., a carmaker that gets 83 percent of its sales abroad, rose 1.6 percent. Shippers gained after Credit Suisse Group AG started coverage of the maritime traffic sector with an "overweight" rating. Japan Tobacco Inc. rose 3.5 percent after the world's fourth-biggest cigarette maker asked the government to sell its shares in the company and use the funds to pay for disaster relief efforts.
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The Nikkei 225 Stock Average rose 2 percent to 8,763.41 as of the 3 p.m. trading close in Tokyo, gaining the most since March 30. It ended at 8,590.57 yesterday, its lowest close since April 28, 2009. The broader Topix index gained 1.7 percent to 753.63, the biggest advance since May 31.
Prime Minister Yoshihiko Noda "is very cautious about a strong yen and has introduced measures to halt its advance," said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion. "Stocks are mainly rebounding from yesterday's losses."
Japanese Finance Minister Jun Azumi yesterday said he will appeal to his Group of Seven counterparts about the danger a strong yen poses to the economy when he meets them for the first time in Marseille, France, on Sept. 9-10. Azumi became Japan's finance chief last week, succeeding Noda.
"Excessive Gains"
The yen touched 77.73 per dollar yesterday, the weakest since Aug. 9, before trading at 77.27 today. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.
Stocks extended gains even after the yen pared yesterday's losses and the Bank of Japan today kept its key interest rate between zero and 0.1 percent and left the amount of its lending and asset-purchase programs unchanged.
Exporters advanced, with Honda gaining 1.6 percent to 2,376 yen. Canon Inc., the world's biggest camera maker, climbed 1.5 percent to 3,500 yen.
Futures on the Standard & Poor's 500 Index rose 0.7 percent today. In New York, the index fell 0.7 percent yesterday amid concern Europe's debt crisis is worsening.
Topix's Performance
The Topix Index fell 1.9 percent to 741.20 yesterday, the lowest close since March 13, 2009, amid concern U.S. economic growth is sputtering and Europe's crisis will damage the banking system, damping demand in two of Japan's biggest export markets. The index has lost 16 percent this year, cutting the price of shares on the gauge to 0.88 times book value, the lowest since March 2009.
The 14-day relative strength index for the Topix fell to 33 yesterday, close to the 30 threshold that some traders see as a sign the index is poised to reverse course.
"Price-to-book ratio shows stocks are cheap, and technical indicators are also showing equities are approaching a buy zone," said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc.
Shipping companies gained after Credit Suisse started coverage of the maritime traffic sector at "overweight," citing cost-cutting efforts to improve earnings.
Nippon Yusen K.K., Japan's biggest shipping line by sales, jumped 2.3 percent to 223 yen. Mitsui O.S.K. Lines Ltd., ranked No. 2, gained 4 percent to 316 yen. Kawasaki Kisen Kaisha Ltd., No. 3, advanced 3.3 percent to 187 yen. Credit Suisse also assigned the three shippers "outperform" ratings.
Japan Tobacco Inc. gained 3.5 percent to 340,500 yen after it said in a statement that selling the government's 5 million shares may raise about 1.7 trillion yen, and that the proceeds should be used to help fund recovery efforts after Japan's record earthquake and tsunami. Enditem
