Staff of Reuters Read for 2 minutes Reuters, TOKYO, July 12 – On Monday, Japanese stocks surged 2%, led by cyclical firms, on revived optimism of a quick global economic recovery, while industry bellwether Yaskawa Electric leapt after lifting its annual profit projection. By 0159 GMT, the Nikkei stock average had risen 2.05 percent to 28,513.09, while the wider Topix had gained 2.04 percent to 1,951.39. Both indexes had dropped in the previous three sessions, with the S&P 500 touching its lowest level in over eight weeks on Friday. Japanese stocks followed Wall Street’s good performance on Friday. Financials and other economically focused sectors led the three major U.S. stock indexes to record closing highs at the close of last week. According to Kentaro Hayashi, a senior strategist at Daiwa Securities, the U.S. market was pushed higher on Friday by economically sensitive value stocks, which benefited the Japanese market, which has many value stocks tied to the global economy. “And Yaskawa Electric’s good earnings and higher outlook revision have provided the market a positive surprise,” he added. Yaskawa Electric’s stock soared as high as 7.57 percent after the business upped its year operating profit prediction by 29 percent. Yaskawa Electric is a robot manufacturer that is recognized as a leading predictor of Japanese manufacturers’ profits trends. Peer Fanuc’s stock increased by 6.31 percent. After Japan’s equipment orders grew for the third month in a row in May, manufacturers of industrial machinery, housing instruments, and steel led the recovery. Recruit Holdings was the top gainer among the top 30 core Topix names, followed by Fanuc. The worst performer among the top 30 core Topix names was Central Japan Railway Co, which fell 0.95 percent, followed by Nintendo, which fell 0.57 percent. The 33 sector sub-indices on the Tokyo market all traded higher except for airlines. 1 yen is worth 110.1400 yen. (Junko Fujita contributed reporting, and Subhranshu Sahu edited the piece.)/n
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