Nikkei 225 Closes Above 19,000 for First Time Since April 2000

(Bloomberg) — Japanese stocks rose, with the Nikkei 225 Stock Average closing above 19,000 for the first time in almost 15 years, as robot-maker Fanuc Corp. surged to a record.

Fanuc soared 13 percent after President Yoshiharu Inaba told the Nikkei newspaper his company is considering increasing returns to investors through dividends and share buybacks. Fast Retailing Co. added 1.7 percent as JPMorgan Chase & Co. raised its rating on the operator of Uniqlo stores. Property developers led gains among the 33 industry groups on the Topix index, with Mitsui Fudosan Co. jumping the most in almost three months. Eisai Co. fell 5.3 percent as drugmakers retreated.

The Nikkei 225 climbed 1.4 percent to 19,254.25 in Tokyo, its highest close since April 2000. The Topix added 0.9 percent to 1,560.33, capping an eighth weekly gain, its longest such winning streak since February 2013, and its highest close since December 2007.

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“There’s still more demand than supply and stocks don’t seem extremely overvalued,” said Ichiro Yamada, general manager of equities at Fukoku Mutual Life Insurance. “Even though there are a lot of negative risks overseas, in the current environment Japanese stocks don’t seem to be very sensitive to them.”

Robots, Dividends

Fanuc soared 13 percent to 26,870 yen after the Nikkei reported the company was considering boosting dividends and share buybacks. A spokesman confirmed the robot maker will start a shareholder-relations department next month. The move comes three weeks after billionaire investor Daniel Loeb started a public campaign demanding changes to increase returns to investors.

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Fanuc “shareholders are expecting reforms to occur and the company to abandon its unique policy of mostly ignoring investor relations,” said Yamada.

Fast Retailing added 1.7 percent to 46,275 yen after JPMorgan raised the stock to overweight from neutral and lifted its price target to 51,500 yen from 42,000 yen.

Mitsui Fudosan jumped 3.9 percent to 3,524.5 yen, the biggest advance since Dec. 19. Sumitomo Realty & Development Co. climbed 5.6 percent to 4,340 yen.

Pharmaceutical companies retreated as traders took profits in the best-performing sector in the Topix this year. Eisai tumbled 5.3 percent to 7,151 yen, while Ono Pharmaceutical Co. fell 2.1 percent to 13,790 yen.

Low Rates

Futures on the Standard & Poor’s 500 Index rose 0.1 percent after the underlying gauge jumped 1.3 percent Thursday. Stocks in the U.S. rebounded from a two-day selloff after a drop in U.S. retail sales boosted speculation the Federal Reserve may delay raising interest rates.

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“The U.S. economy is resilient, but we have to scrutinize very carefully whether it’s strong enough to withstand higher interest rates,” said Mitsuo Shimizu, Tokyo-based deputy general manager at Japan Asia Securities Group Ltd. “Tightening too quickly will impact financial markets, which will ripple through to the actual economy. The central bank won’t be able to exit easing as quickly as the market is forecasting.”

Fed funds futures put the odds of a U.S. rate increase in September at 53 percent on Thursday, down from 56 percent on Wednesday, though still above the 49 percent priced in March 5, the day before a better-than-expected February payrolls report. The Fed meets on March 17-18 to discuss policy. Sales at U.S. retailers dropped 0.6 percent in February after declining 0.8 percent in January. Economists forecast a 0.3 percent gain.

Japanese industrial production rose 3.7 percent in January from December, a report showed today.

To contact the reporters on this story: Yuji Nakamura in Tokyo at ynakamura56@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net

To contact the editors responsible for this story: Tom Redmond at tredmond3@bloomberg.net John McCluskey

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