Japan Stocks Rise as U.S. Confidence Gains, IMF Mulls Bigger EU Safety Net

Japanese shares rose, sending the Nikkei (NKY) 225 Stock Average to its highest close in more than a month, after confidence among U.S. homebuilders topped estimates and the International Monetary Fund said it may expand its lending resources to counter Europe’s debt crisis.

Sony Corp. (6758), a consumer electronics maker that gets 70 percent of its sales overseas, rose 1.7 percent. Sumco Corp. (3436), a maker of silicon wafers, gained the most on the Nikkei 225 after Europe’s biggest maker of chip equipment forecast higher orders. Hitachi Construction Machinery Co., which has benefited from China’s building boom, climbed 2.8 percent on speculation capital requirements for mainland lenders may be relaxed.

The Nikkei rose 1 percent to 8,639.68 at the 3 p.m. close in Tokyo, the highest since Dec. 12. The broader Topix (MXAP) Index climbed 0.8 percent to 740.68, with almost three stocks rising for two shares that fell.

“Investors around the world are starting to think about taking risks again,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo, which oversees the equivalent of $68 billion. “Economic data out of the U.S. has been relatively firm and Europe doesn’t look like it’s going to fall into chaos right away.”

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The gauge advanced 1.1 percent in New York yesterday after confidence among U.S. homebuilders rose in January to the highest level since 2007.

Europe ‘Safety Net’

Shares also gained after a Greek Finance Ministry official told reporters the government could reach an agreement with creditors by the end of this week and the IMF proposed raising its lending capacity by as much as $500 billion to fight the debt crisis.

“It’s good that the IMF is also enhancing the safety net for European financial firms,” said Mitsushige Akino, who oversees about $600 million at Ichiyoshi Investment Management Co. in Tokyo.

Sony, which depends on Europe for a fifth of its sales, 1.7 percent to 1,326 yen. Toyota Motor Corp. (7203) added 1.4 percent to 2,621 yen.

The Topix has gained 1.7 percent this year, compared with a 4 percent gain by the S&P 500 and a 3.7 percent rise by the Stoxx Europe 600 Index. Stocks on the Japanese gauge are valued at 15.3 times estimated earnings on average, compared with 12.5 times for the S&P 500 and 10.2 times for the Stoxx 600.

ASML Orders

Semiconductor-related companies gained after Netherlands- based ASML Holding NV forecast higher orders for chipmaking equipment in the first quarter. Shares also advanced after Linear Technology Corp., which makes chips for cars and industrial equipment, forecast sales in the March quarter that would beat analysts’ estimates.

Sumco, the world’s biggest supplier of the silicon wafers used to make chips, surged 9.4 percent to 607 yen. Advantest (6857) Corp., which makes testers for semiconductors, jumped 7 percent to 753 yen.

Chinese banking regulators are considering a plan to boost growth by easing reserve requirements for lenders, four people with knowledge of the matter said. The world’s second-largest economy, and Japan’s biggest export market, expanded at the slowest pace in 10 quarters in the three months through December.

Hitachi Construction increased 2.8 percent to 1,459 yen. TDK Corp. (6762), a manufacturer of electronic parts which gets almost a third of its sales from China, advanced 4.6 percent to 3,530 yen.

To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net