Japan's Stocks Rise on Yahoo Earnings; Trading Houses Advance

By Masaki Kondo

July 28 (Bloomberg) -- Japan's stocks rose after Yahoo Japan Corp. reported the fastest profit growth in five quarters and as rising metals prices boosted the earnings prospects of commodities producers.

Yahoo Japan, operator of Japan's most visited Web site, sent Internet and communications companies higher. Mitsui & Co., which gets more than half its earnings from commodities, advanced. Ricoh Co., the nation's second-biggest maker of office equipment, jumped to a three-week high after maintaining its full-year earnings targets despite a profit decline in the first quarter.

``So far, earnings at Japanese companies overall weren't as bad as we had thought,'' Tomochika Kitaoka, a Tokyo-based strategist at Mizuho Securities Co., said in an interview with Bloomberg Television. ``Once the companies adjust to the effects of the stronger yen and rising oil prices, earnings will likely recover faster than has been anticipated.''

The Nikkei 225 Stock Average climbed 106.54, or 0.8 percent, to 13,441.30 as of 10:30 a.m. in Tokyo. The broader Topix index rose 9.83, or 0.8 percent, to 1,308.11. Twenty-eight of 33 industry groups on the Topix rose.

Yahoo Japan, the third most profitable company included in the Nikkei, surged 3.6 percent to 41,450 yen, set for the highest since July 10. Softbank Corp., which owns 40 percent of Yahoo Japan, added 1.9 percent to 1,975 yen. Telecommunications and Internet-related shares accounted for more than a 10th of the Topix's gain.

Ricoh, Honda

Mitsui, Japan's second-largest trading company, climbed 4.5 percent to 2,205 yen, the highest since July 7. Mitsubishi Corp., the largest, added 2.3 percent to 3,130 yen. Gold and silver rose in New York on speculation the dollar will weaken against the euro, boosting the appeal of the precious metals as alternative investments.

Ricoh climbed 3.8 percent to 1,775 yen, en route to the highest since July 9. The company reiterated its annual net- income target of a 1.4 percent gain even after posting an earnings drop in the three months to June 30, owing to the stronger yen.

Honda Motor Co., Japan's second-largest automaker, slumped 4 percent to 3,610 yen after slashing its full-year target for operating profit by 3.1 percent because of higher material costs and lower vehicle sales. Automakers were the biggest losers among 33 industry groups on the Topix.

Nikkei futures expiring in September added 0.6 percent to 13,440 in Osaka and gained 0.8 percent to 13,435 in Singapore.

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