Japan Stocks Rise as Berlusconi’s Resignation Lifts Mood; Nomura Rebounds

Japanese stocks rose, snapping a two- day losing streak, after Italy’s embattled Prime Minister Silvio Berlusconi offered to resign, easing concern Europe’s third- largest economy will follow Greece on a path toward default.

Nissan Motor Co., Japan’s third-largest carmaker by market value, rose 2 percent. Nomura Holdings Inc. (8604) rebounded 4.1 percent, leading gains among securities firms after the brokerage plummeted yesterday. Olympus Corp. (7733), which yesterday said it inflated adviser payments to hide investment losses, plunged 20 percent. Jtekt Corp. (6473) led losses among ball-bearing makers after the European Commission investigated companies in the sector for possible antitrust violations.

The Nikkei 225 (NKY) Stock Average rose 1.2 percent to 8,755.44 at the 3 p.m. trading close in Tokyo. The broader Topix index advanced 1.5 percent to 749.40. Stocks slid in the past two days amid concern that a crisis of leadership in Italy would prevent spending cuts from being passed.

“A change in premiership is going to tame political risks somewhat,” said Ayako Sera, a market strategist at Sumitomo Trust & Banking Co. in Tokyo, which manages the equivalent of $322 billion. “Berlusconi’s resignation is a short-term positive for the market.”

The Standard & Poor’s 500 Index advanced 1.2 percent yesterday in New York after Italian President Giorgio Napolitano said Berlusconi agreed to quit if the parliament next week approves austerity measures promised to European partners. The announcement came after Berlusconi yesterday failed to muster an absolute majority on a routine parliamentary ballot. Futures on the S&P 500 dropped 0.2 percent today.

Italian Leadership

“So-called Berlusconi risks are easing,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “Expectations are rising that the next government will make progress on rebuilding its finances.”

Japanese automakers and traders rose, as concerned eased that Europe’s debt crisis will damage the financial system and hurt economic growth. Nissan rose 2 percent to 727 yen. Mitsubishi Corp. (8058), a Japanese trading company, added 4.5 percent to 1,639 yen.

The Topix index has fallen 1.8 percent since Oct. 27, when Japan’s earnings season started in earnest. Of the 1,122 companies that posted quarterly results so far, 192 have missed analyst estimates while 142 have topped them.

Manufacturers with operations in Thailand, including Toyota Motor Corp. and Honda Motor Co., postponed full-year profit forecasts, as flooding disrupted production.

‘One-Two Punch’

“It’s hard to be confident in the outlook for earnings,” Sumitomo Trust’s Sera said. “Japanese companies have been hit by a one-two punch with the Thai floods coming after Japan’s earthquake.”

Nomura gained 4.1 percent to 255 yen. Japan’s biggest brokerage rebounded after dropping 15 percent yesterday amid speculation the company would be implicated in the Olympus scandal. Hajime Ikeda, the brokerage’s managing director of corporate communications, yesterday said Nomura is unaware of any involvement in Olympus’s concealment of losses.

Olympus plunged 20 percent to 584 yen, falling by its trading limit for a second day, after the maker of optical equipment admitted three of its top executives aided in the cover-up. The Tokyo Prosecutor’s Office is investigating whether the company broke securities laws, a senior official from the department said, speaking on condition he not be identified before an official announcement.

The stock has lost three-quarters of its value since former Chief Executive Officer Michael C. Woodford on Oct. 14 questioned the size of payments the company made to advisers on a 2008 acquisition.

Jtekt and other Japanese ball-bearing makers slid after the European Commission said it carried out inspections of companies in the sector to probe whether they violated antitrust rules. The regulator didn’t name the companies.

Jtekt, which said its Dutch unit was investigated, dropped 8.7 percent to 742 yen. Rivals NSK Ltd. (6471) fell 6.6 percent to 524 yen and NTN Corp. (6472) dropped 5.3 percent to 305 yen.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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

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