TOKYO (Dow Jones)--Tokyo stocks rose on Friday as a weaker yen lifted exporter stocks, while Tokio Marine Holdings gained on a reported acquisition, offsetting a steep fall in Takeda Pharmaceutical shares in the wake of a drug suspension.
The Nikkei Stock Average rose 47.29 points, or 0.5%, to 9514.44 following a 0.2% climb on Thursday. The Topix index of all the Tokyo Stock Exchange First Section issues also advanced 4.43 points, or 0.5%, to 817.38.
Volume was robust as nearly 2.42 billion shares traded on the TSE 1st section, driven largely by the concurrent expirations of quarterly Nikkei futures and monthly options contracts.
Stocks opened strongly as investors were heartened by the Dow Jones Industrial Average's first gain in seven sessions, and by a relatively strong dollar that held above the psychologically-important Y80 level throughout the day. The index gave back some gains in the afternoon, however, as declines in other major Asian bourses took a toll.
Major automakers were major beneficiaries of the weaker yen, with Toyota Motor ending up 0.9% at Y3,300 and Nissan Motor rising 1.9% to Y793. Toyota, which released its earnings outlook after the market close, may face a heavy burden in coming days due to very high expectations for the firm in light of recent reports of a speedier-than-expected production recovery, said Takuya Yamada, senior portfolio manager at ITC Investment Partners.
Tokio Marine closed 1.5% higher at Y2,189 on a Nikkei report that it is set to acquire a 49% stake in U.S. insurance agency WNC as part of an industry-wide trend to expand overseas as domestic sales dwindle. The deal would mark the insurance giant's second overall purchase in the U.S.
Shares of Takeda Pharmaceutical fell 2.9% to Y3,665 after French and German drug safety authorities moved to suspend the use of the company's diabetes treatment Actos due to concerns on heightened bladder cancer risks. The reaction was not as severe as expected, thanks to the fact that the drug's patent had already expired in Europe, said Mitsuhige Akino, chief fund manager at Ichiyoshi Investment Management.
"However, there is now the risk that U.S. regulators will re-examine the drug in light of the study results," Akino added. The U.S. is by far the biggest market for Actos, comprising roughly 79% of the drug's global sales in 2010. Europe accounted for about 7.6%.
Kansai Electric Power finished 1.3% lower at Y1,180 following reports that the utility will postpone its planned bond issue due to market volatility and will likely need to ask businesses and households to voluntarily reduce power usage this summer.
"The conservation issue may be easier to swallow for consumers; it's doubtful that any Japanese utility will be able to come to the new issue market any time soon," said a bond trader at a foreign brokerage, noting the extreme illiquidity in the corporate debt market that has persisted since the March 11 quake. "And since utilities are by far the most frequent issuers of paper, this could pose an industry-wide problem through the medium-term," he added.
September Nikkei 225 futures closed up 20 points, or 0.2%, at 9,500 on the Osaka Securities Exchange.
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