Oct. 26 (Bloomberg) -- Japanese stocks rose for the first time in three days as companies reported earnings that exceeded analysts' estimates. Honda Motor Corp. led gains with its biggest jump in six years.

Honda, the nation's No. 2 automaker, reported profit that beat analysts' projections by 13 percent. Sony Corp., the world's second-biggest maker of consumer electronics, climbed the most in 21 months after raising its profit forecast for this year.

Mitsui & Co. advanced to a record, leading commodity-related companies higher after crude oil rose above $92 a barrel for the first time.

``Investors were worried about earnings, but there haven't been many big disappointments and it appears the first half was a strong one,'' said Hiroshi Chano, who helps manage $7.3 billion at Yasuda Asset Management Co. in Tokyo. ``The money flow is increasingly being directed to things like oil. That looks like a trend that'll continue.''

The Nikkei 225 Stock Average rose 221.46, or 1.4 percent, to 16,505.63 at the close of trading in Tokyo. The broader Topix index gained 25.90, or 1.7 percent, to 1,573.97.

Both indexes dropped for a second week. The Nikkei fell 1.8 percent and the Topix declined 1.1 percent.

Ricoh Co., Japan's second-largest maker of office equipment, slumped after the company missed its profit forecast.

Honda soared 330 yen, or 8.9 percent, to 4,040, the biggest climb since October 2001. The company said yesterday second- quarter profit surged 63 percent to 208.5 billion yen, compared with an average analyst estimate of 185.2 billion yen. The company also lifted its full-year net income forecast by 8 percent.

Toyota, Nissan

That helped boost other automakers. Toyota Motor Corp., the country's largest, jumped 290 yen, or 4.9 percent, to 6,240. Nissan Motor Co., the No. 3, rallied 35 yen, or 3.2 percent, to 1,124. Nissan said after the close of trading net income fell 27 percent in the latest quarter as domestic sales slumped.

``Japanese stocks tumbled this week, so the sentiment is that shares are cheap,'' said Fujio Ando, who helps oversee $365 million at Chiba-Gin Asset Management in Tokyo. ``The start of the earnings reports has also sparked expectations for positive announcements.''

Sony surged 450 yen, or 8.8 percent, to 5,560, its steepest gain since January 2006. The company's second-quarter profit exceeded estimates by 3.8 percent and Sony boosted its full-year profit forecast by 3.1 percent to 330 billion yen ($2.89 billion) as rising camera sales offset losses in the games division.

Eiichi Katayama, an analyst in Tokyo at Nomura Holdings Inc., boosted his rating on Sony to ``strong buy'' from ``neutral,'' citing the improving outlook for the games division.

Record Oil Price

Nomura rose 76 yen, or 4.2 percent, to 1,909. Deutsche Bank AG boosted its rating on the shares to ``buy'' after the company reported second-quarter earnings yesterday.

``People have been so focused on the subprime issue, that they've forgotten these financial companies are making money in other areas,'' said Yasuda's Chano.

Mitsui & Co., Japan's second-largest trading company, rose 160, or 5.6 percent, to 3,030. Mitsubishi Corp., which generates the second-biggest proportion of its sales from selling crude and industrial fuel, advanced 140 yen, or 4 percent, to 3,640. Inpex Holdings Inc., Japan's biggest oil explorer, gained 40,000 yen, or 3.3 percent, to 1.27 million.

Crude oil for December delivery jumped 3.9 percent in New York yesterday and rose as much as 2 percent to $92.22 a barrel in trading today. A measure of six metals traded on the London Metal Exchange, including copper and zinc, added 1.3 percent.

Ricoh dropped 100 yen, or 4.2 percent, to 2,280 after saying yesterday net income for the six months ended Sept. 30 was 53.1 billion yen, missing the company's forecast of 56 billion. Kunihiko Kanno, an analyst at Credit Suisse Group in Tokyo, lowered his rating on the company to ``neutral.''

Nikkei futures expiring in December rose 1.3 percent to 16,490 in Osaka and climbed 1.2 percent to 16,490 in Singapore.

Honda Motor Corp. (7267 JT)
Inpex Holdings Inc. (1605 JT)
Mitsubishi Corp. (8058 JT)
Mitsui & Co. (8031 JT)
Nissan Motor Co. (7201 JT)
Nomura Holdings Inc. (8604 JT)
Ricoh Co. (7752 JT)
Sony Corp. (6758 JT)
Toyota Motor Corp. (7203 JT)

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.

Last Updated: October 26, 2007 03:20 EDT