Aug. 3 (Bloomberg) -- Japanese stocks rose, driving the Nikkei 225 Stock Average to a 15-month high, after companies including Astellas Pharma Inc. and Suzuki Motor Corp. posted higher earnings.

Exporters such as Toyota Motor Corp. also gained after a U.S. consumer spending report suggested expansion of the world's largest economy will continue and Japan's top three automakers reported increases in U.S. car sales last month.

``Earnings overall have remained strong and we're in the middle of creating a solid base for testing the highs,'' said Nobuki Goto, who helps look after about $14 billion at Tokio Marine Asset Management Co. in Tokyo. ``We're seeing more and more reports confirming the U.S. economy is in good shape and that's giving some relief to investors.''

The Nikkei added 41.60, or 0.4 percent, to 11,981.80 at 3 p.m. in Tokyo, the highest close since April 28, 2004. The average earlier rose as high as 12,009.56, the first advance above 12,000 since April 28, 2004. The Topix index added 2.83, or 0.2 percent, to 1212.02.

Higher earnings also drove up shares in the U.S., sending the Standard & Poor's 500 Index and Nasdaq Composite Index to their highest in four years.

About 1.6 trillion yen ($14 billion) in shares included in the Topix traded, 37 percent more than the daily average for the past three months. Most money changed hands since June 10. Three shares fell for every one that gained on the Tokyo Stock Exchange's first section.

Political Risk

The Nikkei retreated from 12,000 on concern Prime Minister Junichiro Koizumi may step down amid opposition to his plans to privatize Japan's post office, some investors and analysts said.

Koizumi has called the Japan Post sale the nation's biggest reform in a century, saying private companies rather than bureaucrats should run the institution. Opponents say the sale would result in job losses and end services that private companies aren't willing to offer.

The lower house of parliament approved the sale last month by a vote of 233-228 and the upper house will probably decide on the bill on Aug. 5, Toranosuke Katayama, leader of the ruling Liberal Democratic Party said last week.

The prime minister said at a July 7 press conference that he would take a rejection of the proposal as a vote of no confidence in his government.

``The knee-jerk reaction to a rejection would be to sell,'' said Tokio Marine's Goto, adding that a change in government signals a shift in ``Koizumi's pro-reform government.''

`Earnings Winners'

Astellas, Japan's second-largest drugmaker, jumped 190 yen, or 5.3 percent, to 3,790, the biggest jump since Nov. 18, 2003, before the Yamanouchi Pharmaceutical Co.'s purchase of smaller rival Fujisawa Pharmaceutical Co. in April.

The company yesterday reported a 12 percent increase in first- quarter profit on overseas demand for its Harnal prostate treatment and Prograf drug that helps prevent the rejection of transplanted organs.

Suzuki, the world's largest maker of mini vehicles, climbed 64 yen, or 3.5 percent, to 1,874, highest since April 14. The company said yesterday after the market closed that profit rose to the highest in nine quarters because it sold more motorcycles in Southeast Asia and WagonR minicars in India.

``The market is paying close attention to results and investors are chasing stocks that came out with solid earnings,'' said Susumu Abe, a strategist at Mito Securities Co. in Tokyo. ``The fact that investors are continuing to add to their positions in some of the earnings winners is a reflection of strong market momentum.''

U.S. Personal Spending

Toyota, the world's most valuable carmaker, added 30 yen, or 0.7 percent, to 4,280. After the market closed today, the carmaker posted its second quarterly profit decline, as earnings were hurt by pension costs and currency fluctuations.

A U.S. Commerce Department report showed personal spending jumped 0.8 percent in June. A separate government report showed U.S. factory orders climbed for a fourth month in June, adding to optimism for growth in Japan's biggest trading partner.

An industry measure tracking automakers was the biggest contributor to the Topix's gain after U.S. sales at Toyota, Nissan Motor Co. and Honda Motor Co., Asia's largest automakers, rose at least 8 percent each in July.

Honda advanced 110 yen, or 1.9 percent, to 5,900, while Nissan climbed 9 yen, or 0.8 percent, to 1,176.

Mazda Declines

Not all automakers gained. Mazda Motor Corp., Japan's fourth- biggest carmaker, declined 5 yen, or 1.1 percent, to 457, reversing an earlier advance of as much as 2.4 percent.

The company reported during trading hours that its first- quarter net income fell 96 percent as it took a one-time charge to write down the value of its assets to comply with new Japanese accounting standards.

The Topix Electric Power & Gas Index, which tracks performance of 17 utilities companies, was the biggest drag on the benchmark, falling 0.6 percent.

Tohoku Electric Power Co. led the drop after reporting a 59 percent decline in fiscal first-quarter profit yesterday, prompting UBS AG and Mizuho Securities Co. to cut their ratings on the stock.

Tohoku Electric, Japan's fourth-largest utility, slumped 150 yen, 5.9 percent, to 2,415.

Tohoku Electric's bigger rival Tokyo Electric Power Co. also reported earnings yesterday. First-quarter profit fell 55 percent because of price cuts, a higher fuel bill and increased costs from making PoweredCom Inc. a subsidiary.

Tokyo Electric, Asia's biggest power producer, lost 5 yen, or 0.2 percent, to 2,705.

Among the best performers, Nippon Koshuha Steel Co. soared by the daily exchange-imposed limit of 50 yen to 230. The specialty steelmaker raised its first-half sales forecast 4.7 percent to 20 billion yen as demand for metal increased. The 28 percent surge was the biggest on the first section.

Nikkei 225 futures for September delivery were unchanged at 11,940 in Osaka and slipped 5 points to 11,940 in Singapore.

Astellas Pharma Inc. (4503 JT)
Honda Motor Co. (7267 JT)
Mazda Motor Corp. (7261 JT)
Nippon Koshuha Steel Co. (5476 JT)
Nissan Motor Co. (7201 JT)
Suzuki Motor Corp. (7269 JT)
Tohoku Electric Power Co. (9506 JT)
Tokyo Electric Power Co. (9501 JT)
Toyota Motor Corp. (7203 JT)

To contact the reporter for this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net.

Last Updated: August 3, 2005 03:19 EDT