Japan Stocks Snap 2-Day Loss Streak as Europe Boosts Rescue Fund

Dec. 12 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 Stock Average (NKY) advancing for the first time in three trading sessions, after European leaders expanded a bailout fund and tightened anti-deficit rules, boosting investor confidence the region will escape a deeper crisis.

Sony Corp., which depends on Europe for 21 percent of its sales, rose 1.3 percent. Olympus Corp. gained 7.8 percent after saying it won’t miss a deadline for reporting earnings that would have forced the scandal-hit company to be delisted. Mitsui O.S.K. Lines Ltd. led gains among shipping lines after cargo rates for large vessels rose to a high for the year.

The Nikkei 225 rose 1.4 percent to 8,653.82 as of the 3 p.m. trading close in Tokyo. The broader Topix index gained 1.2 percent to 746.69, with all but one of the 33 industry groups on the gauge advancing. Stocks (TPX) also rose on speculation China will ease monetary policy to boost economic growth.

“Investors were pessimistic before the European summit but it looks like policy makers have made progress toward averting a crisis,” said Tamiji Shinada, executive director of investment and research and investor services department at Nomura Securities Co. “Still, it wasn’t enough to put people’s fears to rest.”

Futures on the Standard & Poor’s 500 Index (SPXL1) fell 0.2 percent today. The index rose 1.7 percent in New York on Dec. 9 after European leaders in Brussels tightened anti-deficit rules and agreed to boost their rescue fund by as much as 200 billion euros ($267 billion) by funneling money to the International Monetary Fund.

U.S. Confidence

Stocks also gained as confidence improved among consumers in the U.S., the world’s biggest economy. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment rose to a six-month high of 67.7 in December from 64.1 in November, beating estimates.

Japan’s exporters advanced, with makers of electronics contributing the most to the Topix’s advance. Sony rose 1.3 percent to 1,423 yen. Gamemaker Nintendo Co. climbed 1.9 percent to 11,070 yen.

Olympus rose 7.8 percent to 1,300 yen after the company said today it plans to release its second-quarter earnings by Dec. 14. Tokyo Stock Exchange rules require the company to be delisted if it misses the deadline.

The volume of shares traded on the Nikkei 225 was 17 percent below the 10-day average before a policy announcement by the U.S. Federal Reserve on Dec. 13.

Shippers Gain

Shipping lines advanced the most among the 33 Topix industry groups after cargo rates for the largest ships that haul dry-bulk raw materials rose to $32,617 a day, this year’s high, according to the Baltic Exchange.

Mitsui O.S.K., Japan’s second-biggest shipping line by sales, gained 6.4 percent to 299 yen after Credit Suisse AG kept its “overweight” rating on Japan’s shippers, citing China’s demand for ore. Nippon Yusen K.K., ranked No. 1, added 4.3 percent to 195 yen. Kawasaki Kisen Kaisha Ltd., No. 3, advanced 3.6 percent to 144 yen.

The Topix index dropped about 17 percent this year amid concern Europe’s debt crisis will drag the region and the global economy into recession. The price of shares on the index is valued at 0.9 times book value, near the lowest since March 2009.

In China, customs data released Dec. 10 showed the weakest export growth since 2009. Overseas shipments rose 13.8 percent last month from a year earlier, while the excess of exports over imports fell by 35 percent.

‘Clearing The Way’

A smaller trade surplus and signs that capital has started to flow out of the country may encourage the ruling Communist Party to add to a Nov. 30 cut in bank reserve requirements, first such move since 2008, according to Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd.

“If the data is slowing down, that’s what’s required in China and clears the way for further policy easing in months ahead,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “I think it’s positive, but there’s always uncertainty in the short-term.”

Komatsu Ltd., a maker of construction machinery that counts China as its biggest market, added 0.9 percent to 1,999 yen. Hitachi Construction Machinery Co, which gets more than a quarter of its sales in China, gained 2.4 percent 1,407 yen.

Among companies that fell, Toyota Motor Corp. dropped 0.7 percent to 2,617 yen. Toyota last week forecast profit will fall 56 percent in the year through March after Japan’s record earthquake and Thailand’s floods hurt production. Nomura Holdings Inc. boosted its investment rating on Toyota to “buy” from “neutral,” saying the company is more likely to see a V- shaped recovery in earnings in the year starting April.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@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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