TOKYO: Japanese stocks rose, led by insurers, as prospects for more buybacks and stronger-than-expected earnings boosted shares.
Dai-ichi Life Insurance Co. surged 10 percent after announcing it will repurchase shares and saying net income will rise more than expected. Mitsubishi UFJ Financial Group Inc. was the biggest boost to the Topix index after profit reached a record and the bank announced a 100 billion yen ($837 million) buyback. Sumitomo Electric Industries Ltd. jumped 7.4 percent as it projected a better-than-expected dividend. Takeda Pharmaceutical Co. dropped 3.7 percent after its profit forecast was below analyst estimates.
The Topix climbed 0.9 percent to 1,621.09 as of 12:37 p.m. in Tokyo after gaining 1.2 percent last week. The Nikkei 225 Stock Average added 0.6 percent to 19,848.65.
“Usually companies are quite conservative with their earnings forecasts, but this time the guidance seems to be considerably more positive than usual,” said Kuninobu Takeuchi, Tokyo-based executive portfolio manager at DIAM Co. “With some 230 trillion yen slushing around on company balance sheets, giving some of that back to shareholders is being seen as favorable.”
Japanese corporates were sitting on 231 trillion yen at the end of December, according to Bank of Japan data. Dai-ichi and Mitsubishi UFJ join Toyota Motor Corp., Fanuc Corp. and a slew of other firms that have recently announced they will return cash to shareholders.
A government report today showed Japanese machine orders rose 2.9 percent in March from a month earlier, beating estimates by economists for a 1.5 percent gain.
E-mini futures on the Standard & Poor’s 500 Index fell less than 0.1 percent after the underlying U.S. measure gained 0.1 percent to close at a record on Friday in New York.
