Most Stocks Climb as Commodity Prices Gain; Canon Leads Drop by Exporters

Most Japanese stocks rose, led by commodity-related companies, as oil and metal prices gained and on speculation the U.S. will expand measures to support the economy. Exporters fell as the dollar traded near a three-week low against the yen, damping the outlook for overseas earnings.

Mitsui & Co., which counts commodities as its largest source of profit, climbed 1.5 percent. Sumitomo Metal Mining Co., Japan’s largest gold producer, advanced 3.4 percent. Canon Inc., which is the world’s biggest camera maker and gets more than 80 percent of its sales abroad, fell 1 percent. Federal Reserve Chairman Ben S. Bernanke said the Fed may buy more Treasury securities, according to an interview with CBS television.

“The message that the U.S. will continue its easing policy until the economy recovers is leading to speculation that excess liquidity will continue to support the market,” said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. “Commodities markets are doing well because of the speculation, and that’s supporting the stock market.”

Four stocks advanced for each that declined among the 1,664 companies in the Topix index, which gained 0.3 percent to 881.41 at the 3 p.m. market close in Tokyo. The Nikkei 225 Stock Average fell 0.1 percent to 10,167.23, and moved between today’s high and low in the narrowest range since last Dec. 21.

The number of Topix-listed shares that traded was 1.48 billion, the lowest level since Oct. 25.

Valuations, Commodities

The Nikkei 225 rose 8 percent last month, the fastest pace among indexes for the world’s 45 largest equity markets, as the dollar strengthened from a 15-year low against the yen. The Fed expanded record measures last month to support the world’s biggest economy, offsetting concern that Europe’s government- debt crisis and China’s steps to curb property-price inflation will slow global growth.

Stocks in the Nikkei trade at 17.8 times estimated earnings on average, less than half the level of 43.5 times at the start of the year.

Mitsui advanced 1.5 percent to 1,361 yen. Sumitomo Metal Mining jumped 3.4 percent to 1,370 yen, the second-largest gain in the Nikkei 225. Marubeni Corp., Japan’s fourth-biggest trading company by revenue, increased 0.7 percent to 573 yen.

Crude oil for January delivery jumped 1.4 percent in New York on Dec. 3 to $89.19 a barrel, the highest settlement since Oct. 7, 2008, as the dollar tumbled and boosted the appeal of commodities as an alternative investment. Copper rose 0.5 percent on Dec. 3, while gold futures advanced 1.2 percent.

Shipping Lines Advance

Nippon Yusen K.K., Japan’s biggest shipping line by sales, increased 1.1 percent to 377 yen, the highest close since April 30. Mitsui O.S.K. Lines Ltd., the second-largest, climbed 1.2 percent to 587 yen. Kawasaki Kisen Kaisha Ltd., the No. 3, gained 1.1 percent to 357 yen.

The Baltic Dry Index of shipping rates for commodities rose 1.6 percent on Dec. 3 to its highest level in a week.

Bernanke said Fed purchases of Treasury securities beyond the $600 billion announced last month are possible and that U.S. unemployment may take five years to fall to a rate of about 5 percent to 6 percent, according to an interview with CBS’s “60 Minutes” program that aired in the U.S. on Sunday night.

“Risk assets are moving into commodities,” said Toshiyuki Kanayama, a market analyst at Tokyo-based Monex Inc. “The dollar’s weakness against the yen on the backdrop of a slow U.S. jobs recovery will weigh on some of the Japanese exporters.”

Dollar Hurts Exporters

Canon declined 1 percent to 4,070 yen. Honda Motor Co., Japan’s second-largest carmaker by sales, retreated 0.6 percent to 3,135 yen. Panasonic Corp., an electronics maker that gets more than 40 percent of its sales outside Japan, dropped 1.2 percent to 1,191 yen. They were the heaviest drags on the Topix.

The dollar tumbled on Dec. 3 after U.S. Labor Department figures showed payrolls increased by 39,000 last month, less than the most pessimistic projection of economists surveyed by Bloomberg News. Unemployment held near a 26-year high.

The dollar traded as low as 82.57 yen today in Tokyo, near its lowest level in three weeks. A weaker dollar reduces the value of overseas income at Japanese companies when converted into their home currency.

NGK Insulators Ltd., a maker of electrical insulators and industrial ceramics, jumped 5 percent to 1,348 yen, today’s steepest gain in the Nikkei 225 and the gauge’s biggest support. Credit Suisse Group AG boosted its investment rating on the shares to “outperform” from “neutral.”

To contact the reporters on this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net; Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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