Japanese Stocks Advance After U.S. Inflation Concern Recedes

By Masaki Kondo


Aug. 6 (Bloomberg) -- Japan's stocks rose amid expectations inflation in the U.S. will abate, and Japanese makers of electronics and cars will weather a slowdown in the world's largest economy.

Honda Motor Corp., Japan's second-biggest automaker, rose 3.6 percent, while Matsushita Electric Industrial Co. rose 1.9 percent. Video game maker Konami Corp. was poised to advance after reporting its biggest quarterly profit gain in two years.

The Nikkei 225 Stock Average climbed 138.35, or 1.1 percent, to 13,053.01 as of 9:06 a.m. The broader Topix index rose 18.16, or 1.5 percent, to 1,265.87.

``Japanese stocks have been oversold and some technical indexes suggest there is a buying opportunity,'' Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo, said in an interview with Bloomberg Television.

The Federal Reserve said yesterday it ``expects inflation to moderate'' from later this year and left the benchmark interest rate unchanged. U.S. consumer prices surged 5 percent in the past year, the biggest jump since 1991 on rising fuel and food prices.

Crude oil, which lost 1.8 percent to $119.17 a barrel in New York yesterday, rose 65 percent in the year through yesterday, spurring Japan's consumer prices to climb at its fastest pace in a decade.

Konami reported a 66 percent jump in first-quarter operating profit yesterday as the release of the latest edition of its ``Metal Gear Solid'' video game series boosted sales. That's the biggest advance in quarterly operating profit since June 2006, according to data compiled by Bloomberg.

Nikkei futures expiring in September added 1.8 percent to 13,150 in Osaka and gained 1.6 percent to 13,135 in Singapore.

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