Japan Stocks Advance on Drop in Crude, Weaker Yen; Hoya Jumps

By Masaki Kondo

Aug. 11 (Bloomberg) -- Japan's stocks rose, sending the benchmark index to the highest in almost three weeks, after crude oil traded near a 14-week low and a drop in the yen boosted the earnings outlook for manufacturers.

Sumitomo Rubber Industries Ltd., Japan's third-biggest tiremaker, jumped the most in more than six months. Fuji Heavy Industries Ltd., the maker of Subaru cars, climbed to a one-year high after the yen weakened to a near a seven-month low. Hoya Corp., the nation's largest maker of optical glass, soared after saying profit rose by a quarter.

``Businesses have been under pressure to pass on higher costs to consumers, though Japan's weak demand makes it difficult,'' said Hisakazu Amano, head of fund management at T&D Asset Management Co., which oversees the equivalent of $39 billion in Tokyo. ``Lower oil prices will reduce that burden.''

The Nikkei 225 Stock Average climbed 262.50, or 2 percent, to close at 13,430.91 in Tokyo, the highest since July 24. The broader Topix index rose 20.07, or 1.6 percent, to 1,280.00. More than two stocks gained for each that fell on the Topix.

Crude fell to as low as $114.62 a barrel on Aug. 8, the lowest since May 2, as the appreciation of the dollar reduced the appeal of commodities as an inflation hedge. The contract rebounded today on concern oil supplies from the Caspian Sea may be disrupted should the conflict in Georgia escalate.

The yen today fell as low as 110.39 against the U.S. currency, the weakest since Jan. 2, from 109.63 at the close of stock trading in Tokyo on Aug. 8. A weaker local currency boosts the value of Japanese companies' repatriated sales.

Nikkei futures expiring in September added 2 percent to 13,430 in Osaka and gained 2.1 percent to 13,420 in Singapore.

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