Oct. 6 (Bloomberg) -- Japanese stocks rose after the Financial Services Minister said banks won’t have to boost provisions for bad loans under his proposed debt moratorium and U.S. service industries returned to growth.

Mitsubishi UFJ Financial Group Inc. climbed 4.4 percent. Nissan Motor Co., which gets 36 percent of its sales in North America, gained 3.7 percent. Nomura Holdings Inc. climbed 4.4 percent after the Nikkei newspaper said the brokerage attracted more investors than initially planned to its share sale. Bic Camera Inc., a consumer-electronics retailer, sagged 3.9 percent after posting a 46 percent drop in annual earnings.

The Nikkei 225 Stock Average veered between gains and losses 16 times before closing up 0.2 percent at 9,691.80 in Tokyo, its first advance in four sessions. The broader Topix index added 0.5 percent to 871.63, with five stocks retreating for every four that rose.

“The U.S. service report is one of the few bright spots we’ve come across recently, but that report alone isn’t enough to reassure investors,” said Hiroshi Morikawa, a senior strategist at MU Investments Co., which manages the equivalent of $14 billion. “Japan’s domestic economy isn’t resilient enough” to offset a global slowdown.

The Topix has lost 11 percent from this year’s high on Aug. 26 as the government of newly elected Prime Minister Yukio Hatoyama failed to convince investors it could revive consumer spending by boosting minimum wages for “hard-working” people. Shares on the gauge traded at 1.07 times corporate net worth yesterday, the lowest level since July 15, according to data compiled by Bloomberg.

Banks Advance

Mitsubishi UFJ gained 4.4 percent to 475 yen, and Sumitomo Mitsui Financial Group Inc., the No. 3, added 3.6 percent to 3,160 yen. Financial Services Minister Shizuka Kamei said in an interview published today that lenders won’t have to boost provisions for bad loans if borrowers delay repayments.

Kamei said on Sept. 15 that he would consider allowing small businesses to postpone payments, causing bank shares to underperform the Topix since then.

In New York, the Standard & Poor’s 500 Index rose 1.5 percent yesterday, breaking a four-day losing streak. The Institute for Supply Management said its index of non- manufacturing businesses climbed to 50.9 in September, exceeding the dividing line between expansion and contraction for the first time in a year.

Nissan, Japan’s third-largest automaker, climbed 3.7 percent to 613 yen. Sony Corp., which gets 23 percent of its sales from the U.S., added 1.5 percent to 2,435 yen. Makers of cars and electronics were the second- and third-biggest contributors to the Topix’s advance, following banks.

‘Rubber Bands’

Property developers as a group led gains today among the 33 industries in the Topix after having had the steepest decline among 33 industries since Sept. 16, the day Hatoyama officially became prime minister following the Aug. 30 election.

“Stocks are like rubber bands: they push back after being compressed and pull back after being stretched,” said Yoshifumi Kikuchi, head of the dealing division at Tokyo-based Nissan Century Securities Co. “After shares have been sold heavily, even a small piece of positive news will trigger a rebound.”

Mitsubishi Estate Co. added 3.7 percent to 1,390 yen. Market leader Mitsui Fudosan Co. rose 2.9 percent to 1,488 yen, breaking an 11-day losing streak.

Nomura advanced 4.4 percent to 618 yen, extending a three- day gain to 16 percent. The brokerage, which yesterday set the price of new shares being sold at 568 yen apiece, attracted 10 times more orders from overseas investors than were available, the Nikkei newspaper reported today.

Bic Camera fell 3.9 percent to 30,500 yen, the lowest close in four months. Operating profit dropped 46 percent in the year ended Aug. 31, the company said yesterday in a preliminary earnings report, as more spending on marketing failed to counter the “challenging situation caused by stagnant consumption.”

KDDI Corp., Japan’s No. 2 mobile-phone carrier, slid 2.4 percent to 499,000 yen. Chubu Electric Power Co. sank 2.3 percent to 2,145 yen. Phone operators and electricity generators were the heaviest drags on the Topix.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

Last Updated: October 6, 2009 03:46 EDT