Japan Stocks Snap Two-Day Losing Streak on U.S. Data; Tepco, Olympus Soar

Jan. 10 (Bloomberg) -- Japanese stocks rose, snapping a two-day loss, after U.S. jobs data buoyed optimism the world’s largest economy is weathering Europe’s debt crisis.

Honda Motor Co. (7267), a carmaker that gets 44 percent of its sales in North America, rose 1.4 percent. Tokyo Electric Co. jumped 24 percent after a newspaper reported the government will buy its stock, lifting optimism the utility will avoid delisting. Olympus Corp. (7733) surged 20 percent after a report the scandal-hit camera maker is likely to remain on the Tokyo Stock Exchange. Mitsui O.S.K. Lines Ltd. led shipping lines downward after cargo rates slid.

The Nikkei 225 Stock Average added 0.4 percent to 8,422.26 at the 3 p.m. close in Tokyo. The broader Topix Index gained 0.3 percent to 731.93, with about two stocks rising for each that fell. Japan’s markets were closed yesterday for a public holiday.

Asia and the U.S. are being hit less by Europe than expected, which is positive for Japan’s stocks,” said Shintaro Takeuchi, portfolio investment group manager at Tokio Marine & Nichido Fire Insurance Co., which oversees $113 billion in assets. “U.S. economic data continue to be firm.”

Futures on the Standard & Poor’s 500 Index rose 0.5 percent today. The gauge added 0.2 percent in New York yesterday as German Chancellor Angela Merkel and French President Nicolas Sarkozy said they may complete euro-zone budgetary rules as early as this month to help stem the debt crisis.

U.S. Economy

Japanese exporters rose as U.S. consumer credit in November had its biggest rise since 2001 and unemployment fell to the lowest in almost three years in December, government data showed. Economists expect a report due on Jan. 12 to show retail sales rose 0.3 percent last month, according to median estimates.

Honda rose 1.4 percent to 2,487 yen. Funai Electric Co., a television maker that gets half it sales in the U.S., rose 3 percent to 1,922 yen.

Tokyo Electric (9501), also known as Tepco, jumped after the Nikkei newspaper said Japan’s government may buy the firm’s common stock. The state-run Nuclear Damage Liability Facilitation Fund aims to hold more than two-thirds of voting rights in the utility as part of a planned 1 trillion yen ($13 billion) cash injection, the report said without saying where it got the information. The stock soared 24 percent to 215 yen after sliding as much as 12 percent.

The possible government purchase of the utility’s equity will reassure investors, said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.

“It means it will avoid being delisted,” Nakanishi said. “That’s creating a sense of safety and causing the stock to be bought back. Tepco will go bankrupt without government’s supervision.”

Olympus Jumps

Olympus soared 20 percent to 1,263 yen after the Nikkei reported the company is likely to remain listed on the Tokyo Stock Exchange. The bourse is expected to make a final decision this month, the report said, without citing anyone. The stock earlier surged as much as 28 percent, the biggest advance since at least September 1974.

Shipping companies fell the most among the Topix’s 33 industry groups after the Baltic Dry Index (BDIY), a measure of shipping costs for commodities, fell 2.9 percent to its lowest since Aug. 15. The gauge has lost a third of its value since Dec. 12.

Mitsui O.S.K. Lines Ltd. (9104), Japan’s second-biggest shipping line by sales, dropped 7.5 percent to 261 yen. Nippon Yusen K.K. (9101), the sector leader, lost 4.7 percent to 183 yen. Kawasaki Kisen Kaisha Ltd. (9107) slid 3.8 percent to 128 yen.

China Exports Slow

Stocks maintained gains even after data showed today that China’s export growth slowed and imports rose less than economists had expected. Gains were also limited after the euro touched 97.28 yen yesterday, the lowest level since December 2000. A stronger yen hurts Japanese exporters because it erodes the value of their overseas income.

Japanese stocks tumbled last year amid a surge in the yen, natural disasters and nuclear meltdowns at Tokyo Electric’s Fukushima Dai-Ichi power plant. The Topix dropped 19 percent in 2011, the biggest yearly decline since 2008, exceeding an 11 percent decline on the Stoxx Europe 600 Index, ground zero for the region’s debt crisis.

The price of shares on the Topix is valued at 0.88 times estimated book value, near the lowest since March 2009. A number below one means investors can buy companies for less than the value of their assets.

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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