Japanese Stocks Rise on U.S. Confidence, China Manufacturing

Japanese stocks rose, reversing declines as carmakers and commodity traders advanced after reports showed improving consumer confidence in the U.S. and faster-than expected manufacturing growth in China.

Toyota Motor Corp., the world’s biggest carmaker, jumped 2.8 percent. Mitsubishi Corp., Japan’s largest trading company, climbed 0.9 percent. Fanuc Corp., which is Japan’s No. 1 maker of industrial robots by revenue and gets more than 40 percent of its sales in Asia excluding Japan, rallied 1.8 percent. Asahi Glass Co. and Nippon Electric Glass Co. both slumped at least 3 percent after Goldman Sachs Group Inc. cut investment ratings.

“Consumption in the U.S. looks solid, and we’ve seen signs of a better-than-expected recovery in the economy,” said Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co., which oversees about $104 billion. “A strong Chinese economy is positive, but at the same time that means an increasing possibility of further tightening.”

The Nikkei 225 Stock Average rose 0.5 percent to 9,988.05 at 3 p.m. in Tokyo after falling as much as 0.2 percent and drifting between gains and losses about 50 times. The broader Topix index climbed 0.6 percent to 866.07, with five stocks advancing for every four that declined.

The Topix has decreased 4.6 percent in 2010, compared with gains of 5.9 percent by the Standard & Poor’s 500 Index and 3.1 percent by the Stoxx Europe 600 Index. Stocks in the Japanese benchmark are valued at 15 times estimated earnings on average, compared with 13.9 times for the S&P 500 and 11.6 times for the Stoxx 600.

U.S. Confidence Rises

Carmakers contributed the most to the Topix’s gain, followed by trading companies. Toyota rose 2.8 percent to 3,310 yen, the highest close since June 16, and was the most-actively traded stock by value in Japan. Honda Motor Co., Japan’s second-biggest carmaker by sales, jumped 2.3 percent to 3,080 yen. Nissan Motor Co., the No. 3, advanced 1.9 percent to 800 yen.

Nintendo Co., the world’s largest maker of portable video- game machines, extended yesterday’s 3.4 percent jump, gaining 2.2 percent to 23,230 yen. Nintendo said yesterday it sold more Wii game consoles in the U.S. this year than last year in the week including “Black Friday,” the Friday following the Thanksgiving holiday, so named because that’s when many U.S. retailers become profitable.

The U.S. Conference Board’s sentiment index increased to 54.1 in November, exceeding the median forecast in a Bloomberg News survey, figures from the New York-based research group showed yesterday. The Institute for Supply Management-Chicago Inc. said its business gauge advanced to the highest since April.

‘Economic Recovery’

“As the global economy recovers and the trend of sharp yen appreciation stops, we’re seeing the conditions for Japanese stocks to catch up with other markets,” said Yoshihisa Okamoto, who helps oversee about $34 billion at Tokyo-based Mizuho Asset Management Co.

The yen traded at an average of 82.48 against the dollar in November, weakening from 81.87 in October, according to data compiled by Bloomberg. A weaker yen boosts the value of overseas income for Japanese companies when repatriated.

Mitsubishi, which gets about half of sales from commodities, advanced 0.9 percent to 2,134 yen. Mitsui & Co., which counts commodities as its largest source of profit, climbed 0.8 percent to 1,318 yen. Sumitomo Corp. jumped 3.7 percent to 1,132 yen.

In China, the Purchasing Managers’ Index, a measure of manufacturing, rose to 55.2 from 54.7 in October. That was more than the 54.8 median estimate of 14 economists surveyed by Bloomberg News.

China Manufacturing Increases

Commodity prices increased after the report. Crude oil for January delivery climbed 0.5 percent to $84.50 a barrel in electronic trading in New York. Copper futures gained 0.5 percent in London.

Fanuc climbed 1.8 percent to 12,200 yen and was the biggest support for the Nikkei. Toshiba Machine Co., a machine-tool maker that gets 34 percent of its annual sales in Asia outside Japan, climbed 1.8 percent to 390 yen. Mori Seiki Co., a machine-tool maker that gets 19 percent of its revenue in Asia ex-Japan, jumped 3.8 percent to 893 yen.

Glassmakers declined the most among the Topix’s 33 industry groups. Asahi Glass tumbled 3 percent to 905 yen after Goldman Sachs reduced its rating to “sell” from “neutral.” Nippon Electric Glass, which was cut to “neutral” from “buy,” sank 3.2 percent to 1,138 yen. Nippon Sheet Glass Co. retreated 2.6 percent to 191 yen. The three companies led declines in the Nikkei 225.

“We decided to downgrade the two stocks not only because we think current capacity expansion will lead to oversupply but also because we note that LCD glass makers are starting to act more aggressively,” Goldman Sachs analyst Takashi Watanabe said in a report dated yesterday. LCDs are liquid-crystal displays.

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