Nov. 4 (Bloomberg) -- Japanese stocks rose after U.S. President George W. Bush won a second term, boosting optimism that the world's largest economy will sustain its growth. Exporters such as Toyota Motor Corp. and Sony Corp. gained.

``Bush's policies are perceived well in the market,'' said Naoyuki Torii, who helps manage $2 billion as the head of Japanese equities at Fukoku Capital Management Inc. in Tokyo. ``His tax reductions will boost economic growth and consumer spending, which will be positive for exporters.''

The Nikkei 225 Stock Average jumped 0.5 percent to 10,946.27 at the 3 p.m. close in Tokyo. The Topix index added 0.6 percent to 1101.89, with automakers and computer-related shares accounting for more than a quarter of the advance. Japan's markets were closed for a holiday yesterday.

Morgan Stanley Capital International's Asia-Pacific Index, which tracks about 900 companies, rose 0.2 percent to 93.20, set for its highest close since April 28.

South Korea's Kospi index and China's indexes had the biggest declines in the region after oil prices had the largest gain in two weeks in New York yesterday on Bush's re-election. Bush plans to add at least 57 million barrels to the U.S. emergency stockpile, which will cut supplies for commercial use.

Australia's stock index rose for an eighth day, the longest winning stretch in more than a year. Stock benchmarks rose in India and New Zealand, and fell elsewhere.

`Strength'

Japanese shares rose on optimism Bush's tax cuts will encourage consumer spending, stoking demand for goods including flat-screen televisions, digital cameras and cars. In his first term, Bush cut the top personal income-tax rate and won approval to lower the dividend-tax rate for the highest bracket.

Toyota, the world's biggest automaker by market value, added 1.7 percent to 4,110 yen. Honda Motor Co., Japan's No. 3 carmaker, rose 0.6 percent to 5,210 yen. Nissan Motor Co., which gets as much as 80 percent of its operating profit from North America, climbed 0.4 percent to 1,155 yen.

Shares of Japan's three largest automakers also jumped after they helped lead Asian car companies to a record 35.9 percent market share in the U.S. last month, according to Bloomberg data.

``Japanese automakers have been able to show their strength in the U.S.,'' said Yutaka Miura, an equity manager at Shinko Securities Co. in Tokyo. ``Their performance has been commendable.''

Economic Policies

Sony, the world's second-biggest consumer electronics maker, climbed 1.4 percent to 3,720 yen. The company relies on the U.S. for more than a quarter of its sales. Canon Inc., the world's second-biggest seller of digital cameras, added 1.3 percent to 5,310 yen.

Bush received at least 274 electoral votes, four more than needed for victory. He's presided over an economy that expanded at a 3.9 percent annual rate in the first three quarters of this year after growing 3.1 percent last year and 2.2 percent in 2002. The unemployment rate dropped to 5.4 percent in September from a nine-year high of 6.3 percent in June 2003.

``Bush's policies, such as reducing taxes and increasing government spending, are perceived to be good for global growth,'' said Hans Kunnen, who helps manage the equivalent of $14.4 billion at Colonial First State Investments in Sydney. ``Anything that's good for the world's biggest economy ultimately feeds through to our own stocks.''

Deficit

The Nikkei pared a gain of as much as 1.1 percent and Australia's S&P/ASX 200 Index trimmed an advance of 0.6 percent

Investors including Masayuki Kubota at Daiwa SB Investments Ltd. in Tokyo said the gains may not last on concern that Bush's policies will lead to widening U.S. budget deficits and increasing fuel costs.

The U.S. budget deficit widened to a record $412.6 billion in the fiscal year ended Sept. 30 as tax cuts and fighting in Iraq contributed to the third annual shortfall under Bush.

``There is still a problem with the U.S. budget deficit and there will be very little room for any further economic policies,'' said Kubota, who helps manage the equivalent of $9.1 billion in Japanese equities at Daiwa SB Investments in Tokyo.

South Korea's Kospi fell 1.1 percent, sliding for the first day in six, on concern oil prices will dent growth in Asia's fourth-largest economy.

Crude oil for December delivery rose 2.5 percent to $50.88 a barrel in New York yesterday, the biggest gain since Oct. 20. It recently fell 0.7 percent to $50.55 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Higher Oil Prices

Samsung Electronics Co., the nation's biggest exporter, fell 1.2 percent to 448,000 won. Korea Electric Power Corp., the utility that spends more than a quarter of its fuel budget on oil to generate electricity, shed 0.7 percent to 23,050 won.

``Bush's re-election means higher crude oil prices and a weaker dollar, which is not good for South Korea, which depends on imports for almost all of its crude needs,'' said Huh Jae Hwan, a market strategist at Tong Yang Investment Bank Co. in Seoul.

Asian airlines fell. Jet fuel, a product of crude oil, accounts for about a fifth of some carriers' expenses.

Korean Air Lines Co., South Korea's largest airline, slid 3.4 percent to 16,950 won.

Cathay Pacific Airways Ltd., Asia's sixth-biggest airline by sales, lost 1.5 percent to HK$13.40 in Hong Kong. A 1-cent increase in the price of aviation fuel adds HK$60 million ($7.7 million) to costs.

China Southern Airlines Co., the country's biggest air carrier, shed 1 percent to 4.18 yuan.

AMP

The Shanghai Composite Index, which tracks yuan-denominated A shares and foreign-currency B shares on the Shanghai Stock Exchange, dropped 1.7 percent to 1304.78. The Shenzhen Composite Index lost 2.4 percent to 328.29. Both had the biggest declines since Oct. 14.

AMP Ltd., Australia's largest life insurer, jumped 5 percent to A$6.90 on speculation Australia & New Zealand Banking Group Ltd. may make an offer for the company. The shares pared a 9.6 percent jump after ANZ Bank, the nation's third-biggest lender, denied the speculation.

AMP Ltd. (AMP AU)
Canon Inc. (7751 JT)
Cathay Pacific Airways Ltd. (293 HK)
China Southern Airlines Co. (600029 CH)
Honda Motor Co. (7267 JT)
Korea Electric Power Corp. (015760 KS)
Korean Air Lines Co. (003490 KS)
Nissan Motor Co. (7201 JT)
Samsung Electronics Co. (005930 KS)
Sony Corp. (6758 JT)
Toyota Motor Corp. (7203 JT)

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

Last Updated: November 4, 2004 03:31 EST