Japan Stocks Jump on Faster-Than-Expected U.S. Economic Growth

By Masaki Kondo

Aug. 29 (Bloomberg) -- Japan's stocks jumped after faster- than-estimated growth in the U.S. boosted confidence demand for Japanese-made goods will persist in the world's largest economy.

Mazda Motor Corp., Japan's fourth-largest automaker, climbed 1.4 percent, while Matsushita Electric Industrial Co. added 1.4 percent. Video game maker Tecmo Ltd. was poised to surge after receiving a buyout offer from rival Square Enix Co. Fujifilm Holdings Corp. was set to drop after the company cut its annual profit target by more than a quarter.

``I expect a big rally today,'' Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., said in an interview with Bloomberg Television. ``Technical indicators show Japan's stocks have been oversold to the extent they've become attractive.''

The Nikkei 225 Stock Average climbed 150.24, or 1.2 percent, to 12,918.49 as of 9:03 a.m. in Tokyo. The broader Topix index rose 15.21, or 1.3 percent, to 1,234.74.

U.S. gross domestic product climbed at a 3.3 percent annualized pace in the second quarter, the Commerce Department said yesterday. Economists had estimated a 2.7 percent increase.

Meanwhile, Japan's factory output rose 0.9 percent in July from the previous month, the Trade Ministry said today before markets opened, while economists had expected a 0.3 percent decline.

Fujifilm, the world's biggest maker of liquid-crystal display film, slashed its annual net income target by 27 percent owing to rising material costs, it said yesterday after markets shut. UBS AG lowered its rating on the stock to ``neutral'' from ``buy,'' while at least three brokerages including Merrill Lynch & Co. cut their price targets on the shares.

Nikkei futures expiring in September added 1.5 percent to 12,960 in Osaka and gained 1.5 percent to 12,970 in Singapore.

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