Japanese Stocks Climb on U.S. Jobs Data, NTT DoCoMo Earnings

By Patrick Rial

July 31 (Bloomberg) -- Japanese stocks climbed for a second day after a report the U.S. unexpectedly increased payrolls and as NTT DoCoMo Inc. boosted earnings.

Honda Motor Co., which made more than half of its sales in North America last year, rose for the first time in five days. NTT DoCoMo, Japan's largest mobile-phone operator, surged to the highest level since January after net income soared 41 percent in the first quarter. Nintendo Co., maker of the Wii video game machine, plunged the most in six months after its first-quarter profit failed to impress analysts and investors.

``This rebound that we're experiencing looks like it will continue for the time being,'' said Juichi Wako, a strategist at Nomura Holdings Inc., in an interview with Bloomberg Television. ``Employment numbers helped lift U.S. stocks and provide some encouragement that the economy isn't as bad as we'd thought, which is positive for manufacturer shares.''

The Nikkei 225 Stock Average added 39.24, or 0.3 percent, to 13,407.03 as of 9:47 a.m. in Tokyo. The broader Topix index swung between gains and losses, and was up 1.48, or 0.1 percent, to 1,304.47. The Nikkei has slipped 0.4 percent in July, while the Topix has lost 1.1 percent.

ADP Employer Services said U.S. payrolls grew by 9,000 in July, while economists had braced for a drop of 60,000. That helped the Standard & Poor's 500 Index jump 1.7 percent to finish at the highest level since July 1. The official government report on unemployment is scheduled to be released later today.

Earnings Reports

NTT DoCoMo added 2.9 percent to 176,600 yen. The company boosted profit in spite of declining revenue as it has been losing subscribers to rivals KDDI Corp. and Softbank Corp. Analysts had expected recent price competition among the companies would erode profitability.

Capcom Co., the Japanese publisher of ``Resident Evil'' games, jumped 4 percent to 3,360 yen after saying yesterday first-quarter net income more than doubled, driven by sales of its ``Monster Hunter'' game series.

Meanwhile, Nintendo sank 8 percent to 53,000 yen in Osaka after reporting a 34 percent jump in first-quarter profit.

``We think the company needs to step up efforts in Japan, where Wii and DS hardware sales are declining,'' Soichiro Fukuda, an analyst at Nikko Citigroup Ltd., wrote in a note to clients.

Jay Defibaugh, a Tokyo-based analyst at Credit Suisse Group, said Nintendo's first-quarter results were ``in line to modestly disappointing'' in a note to clients.

Non-financial companies on the main board of the Tokyo bourse have so far reported an 11 percent drop in pretax profit with the number of companies cutting earnings forecasts outnumbering those raising by three to one, according to data from Shinko Securities Co.

Oil Spike

Mitsubishi Corp., Japan's largest trading company and which reports earnings today, gained 1.2 percent to 3,300 yen. Inpex Holdings Inc., the country's biggest oil explorer, jumped 3.6 percent to 1.109 million yen.

Crude oil for September delivery rose 3.8 percent to $126.77 a barrel in New York, the biggest gain since July 10. The U.S. Energy Department reported the first decline in gasoline inventories in five weeks, while analysts had predicted an increase.

TDK Corp., Japan's largest maker of magnetic heads for hard- disk drives, added 0.9 percent to 6,660 yen. The company will buy a majority stake in German electronic parts maker Epcos AG for as much as 200 billion yen ($1.85 billion), the Nikkei newspaper reported. TDK said it has not made a takeover agreement.

Nikkei futures expiring in September advanced 0.5 percent to 13,440 in Osaka and added 0.6 percent to 13,445 in Singapore.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.