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Japanese Stocks Advance as Europe Considers Debt Deal; Fanuc, Ricoh Climb

Japanese stocks rose, paring a monthly loss for the Nikkei 225 Stock Average, on speculation Europe may be close to a deal that will allow cash-strapped Greece to roll over some of its debt, helping avert a default and a possible banking crisis.

Fanuc Corp. (6954), a maker of factory robots that gets 11 percent of sales in Europe, rallied 2.6 percent. Ricoh Co. climbed 1.2 percent after the Nikkei newspaper said the European Union will cut tariffs on some office equipment. Tokyo Steel Manufacturing Co. jumped 4 percent after Goldman Sachs Group Inc. raised its rating, saying the maker of construction materials will benefit as Japan rebuilds from the March earthquake and tsunami.

“Investors are turning relatively optimistic,” said Naoteru Teraoka, general manager at Tokyo-based Chuo Mitsui Asset Management Co., which oversees about $28 billion. “France and Germany are coming together in order to rescue Greece. Things are going to calm down.”

Nikkei 225 rose 0.7 percent to 9,648.98 at the 3 p.m. close in Tokyo, paring the gauge’s loss for the month to 0.5 percent. The broader Topix index gained 0.6 percent to 830.34. The index has lost 11 percent since March 10, the day before a magnitude-9 earthquake and tsunami devastated Japan’s northeast coast, triggering the worst nuclear accident in 25 years and leaving more than 23,000 people dead or missing.

‘Spill Over’

Japanese shares have also declined on signs the U.S. economic recovery is slowing and amid a debt crisis in Greece that the International Monetary Fund said could “spill over,” hurting banks in the region that hold the country’s bonds.

Fanuc rallied 2.6 percent to 12,960 yen. Sony Corp. (6758) which sells about 20 percent of its PlayStation game consoles and other products in Europe, advanced 0.3 percent to 2,038 yen. Nintendo Co., the world’s biggest maker of game, climbed 2.9 percent to 14,940 yen.

The euro gained to 115.77 against the yen, compared with 114.05 at the close of stock trading in Tokyo yesterday, amid optimism Greece’s parliament will approve spending cuts and tax increases to help it qualify for bailout money and avoid the currency bloc’s first default. A weaker yen benefits Japanese companies by boosting the value of their overseas income.

Lawmakers in Greece are due to vote on a five-year austerity plan this week that must pass for the country to secure more international aid. Greece needs loans from Europe and the International Monetary fund to cover 6.6 billion euros ($9.4 billion) of maturing bonds in August.

Bailout Cost

France yesterday proposed that Greece’s creditors, the biggest of whom are German and French banks, agree to roll over 70 percent of their bonds into longer maturity debt. The plan would give Greece more time pay back its loans and also meet calls for private business to shoulder some bailout costs, without forcing banks to forgive debt outright.

“We’ve been working on this,” and hope other countries will join the proposal, French President Nicolas Sarkozy said yesterday at a news conference in Paris. Germany’s biggest banks and insurers are weighing the plan, a person familiar with the matter said yesterday.

Office-equipment makers including Ricoh and Seiko Epson Corp. advanced after the Nikkei reported the EU will cut tariffs on printers and copiers equipped with faxes or scanners. The decision will be announced June 29, according to the report. Ricoh gained 1.2 percent to 867 yen. Seiko Epson added 0.6 percent to 1,368 yen.

Japan Rebuilds

Tokyo Steel Manufacturing jumped 4 percent to 828 yen. Goldman Sachs raised the company’s investment rating to “buy” from “neutral,” citing an improving profit outlook as Japanese manufacturing recovers from the March 11 disaster.

Department stores and clothing outlets advanced after a report showed sales at Japanese retailers may be rebounding after slumping in the months following the quake. Sales declined 1.3 percent in May from a year earlier, compared with drops of 4.8 percent in April and 8.3 percent in March, the Trade Ministry said in Tokyo today. The median estimate of economists surveyed by Bloomberg News was for a 2.2 percent decline.

J. Front Retailing Co., Japan’s fourth-biggest retailer by sales, climbed 4.5 percent to 350 yen. Isetan Mitsukoshi Holdings Ltd. (3099), the third-largest, advanced 2.5 percent to 767 yen. Takashimaya Co. rose 2.1 percent to 547 yen.

Consumer lenders advanced 1.9 percent, the most among the Topix index’s 33 industry groups.

Aeon Credit Service Co., a lender part-owned by Japan’s largest retailer Aeon Co., jumped 4.1 percent to 1,089 yen. Daiwa Securities Group Inc. raised the lender’s investment rating to “neutral” from “underperform,” saying there are fewer claims for refunds of overcharged interest than expected.

Among stocks that fell, Canon Inc. (7751), the world’s largest maker of cameras and office equipment, dropped 0.7 percent and TonenGeneral Sekiyu K.K., a unit of Exxon Mobil Corp., declined 0.4 percent. Yesterday was the last day to purchase shares in the company and get a dividend for the April-September period.

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

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

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