April 1, 2014 6:20 am JST

Stock paper gains at Japan's listed firms climbed 30% in fiscal 2013

The Nikkei Stock Average rose 20% in fiscal 2013, which ended Monday.

TOKYO -- Latent gains on equity holdings at listed Japanese companies that close their books in March likely jumped 30% in fiscal 2013 to 15 trillion yen ($144 billion), riding a 20% rise in the Nikkei Stock Average during the 12-month period.

     Although the market rally lost steam in the January-March quarter of fiscal 2013, the market capitalization of stocks on the Tokyo Stock Exchange's first section has increased by 68 trillion yen from a year ago to 431 trillion yen. Electronics and communications issues appreciated at an especially rapid clip.

     With a tailwind from the Bank of Japan's monetary easing, the yen's softening against the dollar bolstered the stock market. As of the end of March, listed firms that conclude their fiscal years in March held 27 trillion yen or so worth of shares, compared with the 12 trillion yen they spent in purchasing them. Potential gains thus amount to 15 trillion yen, the most in seven years.

     KDDI's market capitalization, for example, grew by about 240 billion yen, adding to paper gains for shareholder Kyocera. Fuji Heavy Industries' market cap also increased, bolstering the finances of shareholder Toyota Motor.

     Large paper gains on equity holdings help stabilize corporate finances, "making it easier to pursue mergers and acquisitions," says Kengo Nishiyama of Nomura Securities.

     Four major life insurance companies' latent gains on shareholdings jumped 50% or so to nearly 6 trillion yen. Nippon Life Insurance's grew 30% to 2.82 trillion yen, and Meiji Yasuda Life Insurance's rose to 1.49 trillion yen.