Nikkei 225 Advances as Improving U.S. Data Trumps Europe Concern

 Japan’s Nikkei 225 Stock Average rose, set to snap a three-day losing streak, after U.S. unemployment claims fell to the lowest level in three years, easing concern Europe’s debt crisis will drag the global economy into a recession.

Fanuc Corp., the world’s biggest maker of factory robots, added 1.3 percent. Nippon Yusen K.K. led gains among shipping lines after Citigroup Inc. said the industry is likely to outperform next year. Olympus Corp. fell 3.6 on speculation the camera-maker will struggle to rebuild capital after it inflated its assets by $1.3 billion.

The Nikkei 225 rose 0.3 percent to 8,401.72 at the 3 p.m. close of trading in Tokyo. The benchmark fell 1.6 percent for the week. The broader Topix index slipped 0.2 percent today after Christine Lagarde, the International Monetary Fund’s managing director, yesterday said Europe’s crisis is “escalating.”

“The U.S. economy is ending the year in a bit better shape than people had anticipated, and that is good, but Europe is obviously not,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion. “The European economy is heading toward recession next year, and I think it’s going to continue to weigh on markets.”

Futures on the Standard & Poor’s 500 Index gained 0.4 percent today. The index rose 0.3 percent in New York yesterday after U.S. initial jobless claims fell last week to the lowest level since 2008. Stocks also advanced after reports showed manufacturing in New York and Philadelphia expanded more than forecast in December.

No ‘Buyback Trigger’

“Stocks are being bought back following gains in the U.S. and Europe,” said Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages the equivalent of $37 billion. “People know Japanese shares are cheap, but we won’t see a big buyback without some kind of a trigger.”

Fanuc gained 1.3 percent to 12,230 yen. Sony Corp., Japan’s No. 1 exporter of consumer electronics, rose 1.1 percent to 1,360 yen.

Shipping companies gained the most among the 33 Topix industry groups after Citigroup said the sector, which has dropped 48 percent this year, will lead a rebound in the Topix next year. The gauge will recover 20 percent to 870 in 2012, the bank said in a note dated yesterday.

Nippon Yusen, Japan’s biggest shipping line by sales, jumped 4.8 percent to 196 yen. Mitsui O.S.K. Lines Ltd., its closest rival, gained 5.1 percent to 287 yen.

Kicked While Down

Japanese shares have been hit not only by the European sovereign-debt crisis, now in its third year, but also by a strengthening yen and the nation’s worst earthquake on record. Thai floods also damaged production for companies including Toyota and Sony. The Topix has fallen 20 percent this year, compared with a 3.3 percent loss in the S&P 500 and a 20 decline in the Stoxx Europe 600 Index.

Tokyo Electric Power Co., the utility at the center of the worst nuclear disaster since Chernobyl, has been the worst performer in the Topix this year, losing 89 percent. SxL Corp., a homebuilder that benefited from post-quake reconstruction efforts, jumped 256 percent to 178 yen, the biggest winner on the gauge.

Olympus fell 3.6 percent to 1,004 yen after President Shuichi Takayama said he will consider all options to restore capital, including a tie-up with other companies. Tokyo Stock Exchange rules permit companies to issue new shares to a third party with a dilutive effect of as much as 25 percent without seeking shareholder approval.

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