Japan Stocks Rise on Oil Price Drop, Federal Reserve Comments

By Makiko Kitamura and Masaki Kondo

July 9 (Bloomberg) -- Japanese stocks rose after the price of crude oil fell the most in three months and the Federal Reserve said it may extend its emergency-loan program for investment banks into next year.

Mitsubishi UFJ Financial Group Inc., Japan's largest publicly traded bank, was poised to gain. Canon Inc. rose 1.1 percent. Mitsubishi Corp., which gets half its profit from commodities, declined 0.6 percent. Fanuc Ltd., a maker of industrial robots, was poised to gain after the government said machine orders rose in May.

``Several technical indices are flashing clear signals that stocks have been oversold,'' Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc., said in an interview with Bloomberg Television. ``I see a rebound for today.''

The Nikkei 225 Stock Average climbed 206.83, or 1.6 percent, to 13,239.93 at 9:09 a.m. in Tokyo. The broader Topix index rose 19.73, or 1.5 percent, to 1,303.24. More than 10 shares advanced for every one that fell on the Topix.

Crude oil fell $5.33 to $136.04 a barrel, the biggest drop since March 31. Gold dropped to $923.30 an ounce, and copper fell to $3.6965 a pound.

Machine orders rose 10.4 percent in May, more than economists expected, as demand increased for equipment used in steel and paper production, Japan's Cabinet Office said today.

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