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Japan Stocks Advance as U.S. Economic Optimism Outweighs Europe Concern

Japanese stocks advanced for a second day as increased U.S. hiring boosted the earnings outlook for exporters. Gains were limited before reports expected to show Europe may be edging toward recession.

Sony Corp. (6758), which depends on the U.S. for 20 percent of its sales, rose 0.5 percent. Nomura Holdings Inc. (8604) climbed 3.2 percent on speculation the resignation of its wholesale banking chief will allow the brokerage to revamp after overseas losses. Tokyo Electric Power Co. (9501), which operates the crippled Fukushima Dai-Ichi nuclear plant, fell 6.1 percent after soaring as much as 29 percent yesterday on speculation it will avoid delisting.

The Nikkei 225 Stock Average gained 0.3 percent to 8,447.88 at the trading close in Tokyo. The broader Topix Index added 0.2 percent to 733.47. Securities firms advanced the most among the gauge’s 33 industry groups.

“There are more positive signs particularly on employment” and consumer spending in the U.S., saidStephen Halmarick, Sydney-based head of markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “The outlook in the U.S. is for modest growth this year, and that’s better than Europe. Expectations are Europe will be in a recession.”

Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The gauge rose 0.9 percent in New York yesterday to the highest level since July 29.

U.S. Jobs

U.S. employers hired 4.15 million workers in November, 107,000 more than in the prior month, the Labor Department said yesterday. Economists expect a report tomorrow will show retail sales rose last month, according to the median estimate in a Bloomberg survey.

Sony, Japan’s top exporter of consumer electronics, rose 0.5 percent to 1,350 yen. Funai Electric Co. (6839), a television maker that gets half it sales in North America, gained 2.5 percent to 1,970 yen.

Nomura rose after wholesale banking chief Jesse Bhattal resigned. He is leaving after overseas operations posted their biggest loss in at least six quarters and Moody’s Investors Service said it was considering downgrading the brokerage. Nomura gained 3.2 percent to 259 yen. Daiwa Securities Group Inc. (8601), Japan’s second-largest brokerage, rose 2.5 percent to 251 yen.

European Concern

Gains in Japan’s stocks were limited before a report expected to show Germany’s economic growth slowed to 3 percent last year from 3.6 percent in 2010, according to analysts surveyed by Bloomberg. A separate report may show Spanish industrial output slid 5.4 percent in November from a year earlier after dropping 4 percent in October. Fitch Ratings said Italy faces a “significant chance” of a downgrade, adding to Europe’s debt concerns.

“Taking out the crisis premium means a credible firewall,” David Riley, head of the sovereign-debt unit at Fitch, said at a conference yesterday in London. “At the moment, we don’t have that, and that’s a serious concern with respect to Italy.”

Canon Inc., a camera maker that relies on Europe for a third of its revenue, fell 0.9 percent to 3,285 yen.

Tokyo Electric, also known as Tepco, fell 6.1 percent to 202 yen. It jumped 24 percent yesterday after the Nikkei newspaper reported the government will buy its shares, adding to optimism the company will remain on the Tokyo Stock Exchange.

Olympus Corp. (7733), the scandal-hit optics maker, slid 2.6 percent to 1,230 yen. The shares soared as much as 28 percent yesterday after the Nikkei reported the company will probably be fined by the Tokyo Stock Exchange rather than being delisted for hiding losses.

Bridgestone Shakeup

Bridgestone Corp. (5108) fell 1.5 percent to 1,723 yen after competitor Goodyear Tire & Rubber Co. said yesterday it faces soft global demand. Bridgestone announced management changes during today’s trading break. President Shoshi Arakawa was named chairman and Masaaki Tsuya will be chief executive officer.

Japanese stocks tumbled last year amid a strengthening yen, natural disasters and nuclear meltdowns at Tepco’s Fukushima 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 that tracks companies at the epicenter of the region’s debt crisis.

The price of shares on the Topix is valued at 0.89 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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