June 17 (Bloomberg) -- Japanese stocks rose, snapping a two-day drop, led by green technology-related shares ahead of the start of a Nomura Holdings Inc. fund focusing on the sector.

GS Yuasa Corp., which owns a battery-production venture with Honda Motor Co., soared 12 percent, while Sanyo Electric Co., Japan’s biggest maker of rechargeable batteries, leapt 14 percent. Sumitomo Forestry Co. surged 11 percent after Morgan Stanley upgraded the homebuilder. DA Office Investment Corp. climbed 15 percent on a newspaper report Daiwa Securities Group Inc. plans to invest in the real estate investment trust.

“A moderate recovery in the global economy is already priced into shares, so investors can’t expect this rally to keep going,” said Yoshinori Nagano, who helps oversee about $88 billion at Daiwa Asset Management Co. “They’re trading on a different theme every day in search of quick returns.”

The Nikkei 225 Stock Average rose 87.97, or 0.9 percent, to close at 9,840.85 in Tokyo. The broader Topix index added 8.27, or 0.9 percent, to 923.03, with seven shares gaining for every two that retreated.

The Nikkei has lost 2.9 percent this week and is set for its first weekly decline since the five days ended May 22. Companies on the gauge traded at 44.7 times estimated net income for this fiscal year, almost three times as costly as stocks on the U.S.’s Standard & Poor’s 500 Index.

“Investors’ appetite for bargain hunting is surprisingly strong,” said Naoki Fujiwara, who oversees the equivalent of $3.7 billion at Shinkin Asset Management Co. in Tokyo.

‘Quick Buck’

GS Yuasa, last year’s biggest winner on the Nikkei, soared 12 percent to 1,180 yen, or 174 times estimated net income. Sanyo leapt 14 percent to 279 yen. Meidensha Corp., which supplies parts for Mitsubishi Motors Corp.’s electric cars, jumped 16 percent to 577 yen, the highest since August 1997.

Nomura, Japan’s biggest securities company, is offering a global fund that focuses on companies engaging in environmentally friendly technologies. The brokerage is setting a price on the investment vehicle on June 24.

“Individuals and stock dealers are piling into smaller companies with an environmental theme as a way to make a quick buck,” said Shigeo Kikuchi, a manager at Takagi Securities Co. “When these stocks go up, they rocket up, but when they come down, it’s a huge collapse.”

Sumitomo Forestry added 11 percent to 773 yen in Osaka trading, while Sekisui House Ltd. jumped 3.2 percent to 982 yen. Morgan Stanley raised the stocks to “overweight” and lifted its outlook on Japan’s real estate sector to “attractive,” saying home orders probably bottomed in the first quarter and should benefit from tax breaks.

Property Funds

“We believe the expanded gift tax exemption expected to be enacted this month will boost orders for homebuilders as well as housing starts,” Morgan Stanley analyst Hiroko Kubota wrote in a report dated yesterday.

DA Office jumped 15 percent to 226,900 yen, the steepest climb in six months. Daiwa Securities, the nation’s No. 2 brokerage, will buy about 13 percent of the real estate investment trusts for 10 billion yen ($103 million), the Nikkei newspaper said today.

A gauge of 40 Japanese property funds rose 2.1 percent, and Daiwa Securities inched up 0.5 percent. After markets shut, DA Office said it will sell its share to Daiwa for 10 billion yen.

Nikkei futures expiring in September added 0.6 percent to 9,830 in Osaka and Singapore.

To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Kotaro Tsunetomi in Tokyo at ktsunetomi@bloomberg.net.

Last Updated: June 17, 2009 03:15 EDT