June 1 (Bloomberg) -- Japanese stocks rose, led by carmakers such as Toyota Motor Corp., on expectations that a report will show their U.S. sales increased in May after they reported a 7 percent gain in domestic sales for the month.

``The trend of Japanese carmakers taking up U.S. market share and leading the industry will continue, and the monthly figures will be more evidence in support of that,'' said Youichi Yanai, chief fund manager who oversees the equivalent of $28 billion in assets at the Bank of Tokyo-Mitsubishi Ltd. ``I have no hesitation about buying this market.''

Japan's Nikkei 225 Stock Average added 0.5 percent to 11,329.67 at the 3 p.m. close in Tokyo. The average rose for a fifth day, its longest winning streak since March 7. The Topix index rose 0.5 percent to 1149.49, with carmakers accounting for 20 percent of the advance.

The Morgan Stanley Capital International Asia-Pacific Index, which tracks the performance of more than 1,000 stocks in the region, dropped 0.2 percent to 97.58.

Electronics exporters, such as LG.Philips LCD Co. and Taiwan Semiconductor Manufacturing Co., dropped after a measure of business in Chicago fell to the lowest in more than two years and investors waited for a U.S. manufacturing report later today to gauge the outlook for the world's largest economy.

Stock benchmarks in the region rose, except in New Zealand, South Korea, Taiwan, and Indonesia. China's indexes dropped the most in Asia, with the Shanghai benchmark closing at an eight- year low.

Automakers Gain

Toyota, the world's largest automaker by market value, climbed 0.8 percent to 3,890 yen and Nissan Motor Co., Japan's second largest, added 0.9 percent to 1,077 yen.

General Motors Corp. and Ford Motor Co., the largest U.S. automakers, may report today that May sales fell from a year ago and their U.S. market share slump continued amid gains for Toyota and Nissan, according to each of five forecasters surveyed by Bloomberg. GM and Ford have combined U.S. market share of more than 40 percent.

Last month, Toyota and Nissan, Asia's two biggest automakers, said U.S. sales of cars and trucks increased more than 25 percent, while sales at GM and Ford declined.

A report by the Japan Automobile Dealers Association showed sales of cars, trucks and buses, excluding mini vehicles, by the country's 12 automakers rose 7 percent to 278,661 units in May from the same month last year.

Mitsubishi Motors Corp., which received a $5.2 billion financial bailout in January, surged 8.2 percent to 146 yen. Sales of Mitsubishi Motors' minicars rose for the first time in 14 months, according to the company.

Nissan Diesel Motor Co., Japan's fourth-largest maker of trucks and commercial vehicles, jumped 4.2 percent to 424 yen. The company after the market closed yesterday said it would buy back as much as 27 billion yen ($249 million) in preferred shares and cancel them to prevent share dilution.

Exporters

South Korea's LG.Philips LCD, the world's second-largest maker of liquid crystal displays last year, lost 2.8 percent to 51,500 won. Taiwan Semiconductor, the world's largest supplier of made-to-order computer chips, fell 1.8 percent to NT$55.90.

In the U.S., National Association of Purchasing Management- Chicago said the gauge of business in the area, a center of manufacturing, fell to 54.1 from 65.6 in April, more than economists expected. Readings above 50 indicate growth.

Later today, an Institute of Supply Management report will show growth at U.S. manufacturers probably slowed for a sixth straight month in May, according to economists surveyed by Bloomberg News.

``Demand for Asian technology exports is clouded by the latest figures,'' said Tracy Chen, who manages the $7 million Export Fund at PCA Securities Investment Trust Co. in Taipei. ``Investors will wait for more evidence proving sustainable demand before adding technology stocks.''

China

The Shanghai Composite Index declined 2 percent to 1039.19, its lowest since February 1997, on investor concern about the quality of companies to be selected in the second stage of a pilot program aimed at disposing of state-owned, non-tradable shares valued as high as $245 billion.

``There is a lot of uncertainty about the non-tradable shares, such as when the sales will start and what kind of companies will be included,'' said Guo Yong, chief strategist with GF Securities Co. in Guangzhou. ``The first option is to stay out of the market until things come to light.''

China Petroleum & Chemical Corp., Asia's biggest oil refiner also known as Sinopec, lost 2.5 percent to 3.46 yuan.

The Philippine Stock Exchange Composite Index rose 1.8 percent, the biggest advance in the region. Philippine Long Distance Telephone Co. surged 4.4 percent to a record 1,545 pesos after its Chairman Manuel Pangilinan bought shares in the nation's largest phone company.

Elsewhere, Kiwi Income Property Trust was the region's worst performer. New Zealand's largest publicly traded property investment fund, dropped 6.8 percent to NZ$1.10 after jumping 4.4 percent yesterday. The stock was included in Morgan Stanley Capital International Inc.'s global indexes from today.

China Petroleum & Chemical Corp. (600028 CH)
Kiwi Income Property Trust (KIP NZ)
LG.Philips LCD Co. (034220 KS)
Mitsubishi Motors Corp. (7211 JT)
Nissan Diesel Motor Co. (7210 JT)
Nissan Motor Co. (7201 JT)
Philippine Long Distance Telephone Co. (TEL PM)
Taiwan Semiconductor Manufacturing Co. (2330 TT)
Toyota Motor Corp. (7203 JT)

To contact the reporter for this story: Stuart Kelly in Sydney skelly22@bloomberg.net.

Last Updated: June 1, 2005 05:09 EDT