(Bloomberg) -- Japanese stocks posted their biggest weekly advance in more than four years as the nation’s benchmark indexes continued to claw back losses from the recent rout, led by electronics makers and banks.
The Nikkei 225 Stock Average climbed 3.6%, benefiting from a better economic outlook in the US and the yen’s retreat back toward 150 versus the dollar, which helps support the earnings of exporters. The broader Topix advanced 3%.
“Stocks that saw a huge selloff in the past month are being bought back as the market calms down from the rout,” said Hiroshi Namioka, chief strategist at T&D Asset Management Co. in Tokyo.
Hitachi Ltd. and Toyota Motor Corp. were among the major contributors to the Topix’s advance, while semiconductor-related names like Tokyo Electron Ltd. and Advantest Corp. also climbed.
Bruce Kirk, chief Japan equity strategist at Goldman Sachs Group Inc., recommends investors take advantage of last week’s correction to buy, as the latest selloff was more technical than driven by fundamentals. Global investors were net buyers of Japanese stocks in the week ending Aug. 9, with gross purchases reaching a record, according to preliminary finance ministry data.
The yen’s slump of about 1.5% this week has provided support for the stock market amid signs carry trades are staging a comeback. Nomura Holdings Inc. has seen a variety of investors start borrowing the yen again to invest the proceeds elsewhere in higher-yielding assets.
All 33 of the Topix’s industry sub-indexes advanced weekly as the equity market stabilizes from last week’s worst drop since October 1987. Wall Street’s climb overnight added fuel to the rally after US data on retail spending and the labor market underscored the strength of the world’s largest economy.
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