Japanese Stocks See First Gain in Four Days on Greece, U.S. Factory Orders

Japanese stocks rose for the first time in four days after the European Central Bank unexpectedly lowered interest rates and Greece scrapped a referendum on a bailout package.

Honda Motor Co., a carmaker that gets more than 80 percent of its sales abroad, gained 4.1 percent. Komatsu Ltd. (6301), Asia’s No. 1 maker of heavy machinery by market value, jumped 6.9 percent after U.S. factory orders unexpectedly increased. Mitsui & Co., a trading house that counts commodities as its main source of profit, climbed 2.7 percent after prices for oil and metals advanced.

The Nikkei 225 Stock Average rose 1.9 percent to 8,801.40 at the 3 p.m. close in Tokyo, the biggest gain since Oct. 27. The broader Topix Index advanced 1.8 percent to 752.02, with more than four shares rising for each that fell. The Nikkei lost 2.8 percent for the week, while the Topix slid 2.5 percent.

“Greece’s backdown on a referendum fueled confidence in the market as the worst-case scenario, where that country exits the euro zone, can be avoided,” said Kiyoshi Ishigane, a senior strategist in Tokyo at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $84 billion. “Germany and France are coming out strongly in support of maintaining the euro, which is good for the market.”

The Topix has tumbled 16 percent this year amid concern U.S. growth is sputtering and Europe’s debt crisis will spread to the banking system. The decline has cut the price of shares on the index to 0.89 times estimated book value, near the lowest since March 2009.

U.S. Stocks Rise

The Standard & Poor’s 500 Index yesterday climbed 1.9 percent in New York, as ECB officials unanimously lowered the benchmark interest rate by 25 basis points to 1.25 percent and Greek Finance Minister Evangelos Venizelos, told lawmakers Parliament in Athens, said the nation won’t hold a referendum.

Honda advanced 4.1 percent to 2,398 yen. Nissan Motor Co., Japan’s third-biggest carmaker by market value, gained 4.9 percent to 735 yen. Nissan also got a boost after raising its full-year net income projection 7.4 percent to 290 billion yen ($3.7 billion).

Bridgestone Corp. (5108), Japan’s No. 1 tiremaker by sales, climbed 3.8 percent to 1,867 yen, and helped boosting rubber product manufacturers to the second-largest advance among the Topix’s 33 industry groups.

The yen depreciated to as low as 108.07 against the euro in Tokyo, compared with 107.20 at the close of stock trading on Nov. 2. A lower yen boosts the value of overseas income at Japanese companies when repatriated.

Machinery manufacturers had the biggest gain among the Topix industry groups. Komatsu jumped 6.9 percent to 1,970 yen. Fanuc Corp. (6954), Japan’s No. 1 factory automation equipment maker, climbed 4.3 percent to 12,880 yen. SMC Corp., which makes pneumatic devices, rose 4 percent to 12,430 yen.

U.S. Factory Orders

Overseas demand and corporate investment are driving American manufacturing even as 9.1 percent unemployment threatens to curb consumer spending. Factory bookings climbed 0.3 percent in September after a revised 0.1 percent gain in August that was initially estimated as a drop, figures from the Commerce Department showed in Washington. The median forecast of 68 estimates in a Bloomberg News survey was for a 0.2 percent decline.

Trading companies climbed as crude oil for December delivery gained 1.7 percent to settle at $94.07 a barrel in New York yesterday, the highest settlement since Aug. 1. The London Metal Exchange Index of prices for six metals including copper and aluminum rose 0.5 percent yesterday.

Mitsui gained 2.7 percent to 1,134 yen. Mitsubishi Corp. (8058), Japan’s biggest commodities trader by revenue, climbed 2.3 percent to 1,586 yen.

A U.S. Labor Department report yesterday showed first-time claims for unemployment benefits declined last week to a month low of 397,000. The median estimate of 49 economists in a Bloomberg News survey called for a drop to 400,000.

Minebea, Sony

“The U.S. economy can’t be said to be good, but it’s going to keep a mild rate of growth,” said Mitsubishi UFJ Asset Management’s Ishigane.

Minebea Co., a maker of electronic components, soared 10 percent to 292 yen, the second-steepest rise in the Nikkei 225, after Nomura raised its stock price estimate to 360 yen from 340 yen, citing an earnings recovery in its hard-disk drive motors. The brokerage maintained its “buy” rating on Minebea.

Among companies that fell, Sony Corp., Japan’s largest exporter of consumer electronics, tumbled 7.9 percent to 1,400 yen, the biggest drop in the Nikkei 225 (NKY), after forecasting net loss of 90 billion yen for the fiscal year ending March 31. Sony had forecast a 60 billion yen profit. Barclays Plc cut its rating on Sony to “equal weight” from “overweight.”

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

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

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