Most Japan Stocks Rise After ECB Signals End of Rate Increases

By Makiko Kitamura and Masako Kondo

July 4 (Bloomberg) -- Most Japanese stocks rose after the European Central Bank suggested it may not raise interest rates further, easing concern Japanese exports will slow.

Toyota Motor Corp., Japan's largest carmaker, rose 0.4 percent, and Sony Corp. rose 0.4 percent. Nippon Yusen KK, the nation's biggest shipping line, fell a third day after cargo rates for commodities declined.

The Nikkei 225 Stock Average rose 20.28, or 0.2 percent, to 13,285.68, and the broader Topix index gained 2.16, or 0.2 percent, to 1,300.18 as of 9:03 a.m.

ECB President Jean-Claude Trichet played down prospects of interest-rate increases, saying the quarter-point boost yesterday will help bring inflation back below 2 percent. Meanwhile, U.S. employers cut jobs for a sixth-straight month in June, and service industries shrank to a five-month low.

``Trichet's comments relieved concern in the market,'' Soichiro Monji, chief strategist at Daiwa SB Investments Ltd., which manages about $62 billion, said in an interview with Bloomberg Television. ``A rally may be weak and short-lived, considering the rather bad economic statistics in the U.S. and surging oil prices.''

The ECB's comments pushed the euro to a one-week low against the dollar, curbing demand for metals as a hedge against inflation. Gold dropped 1.4 percent, and copper fell the most in five weeks. Crude oil rose to $145.29 after touching a record at $145.85.

To contact the reporters for this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net.