Japan Stocks Rise on Expectations Manufacturers Can Relay Costs

By Masaki Kondo

July 22 (Bloomberg) -- Japan's stocks rose on renewed expectations manufacturers will weather a slowing economy by passing on higher material costs to customers.

Nippon Steel Corp., Japan's largest maker of the metal, and rival Kobe Steel Ltd. rose on a Nikkei newspaper report they'll probably have smaller profit declines after boosting prices. Mitsubishi Chemical Holdings Corp. rose on a separate Nikkei report it raised polyethylene prices by almost a fifth to alleviate higher oil costs.

``Taking account of current pricing trends, we are likely to see faster-than-expected progress toward companies' earnings targets, especially at steelmakers, shipping companies and telecoms,'' Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co., said in an interview with Bloomberg Television.

The Nikkei 225 Stock Average climbed 143.36, or 1.1 percent, to 12,947.06 as of 9:03 a.m. in Tokyo. The broader Topix index rose 12.31, or 1 percent, to 1,264.74.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.