Japan Stocks Jump on Treasury Bailout; Mitsubishi Gains on Oil

By Patrick Rial
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Sept. 22 (Bloomberg) -- Japan stocks jumped, sending the Topix index to its biggest two-day gain since January, after the U.S. broadened the scope of a $700 billion rescue plan to buy bad debts, and surging oil prices boosted resource stocks.

Resona Holdings Inc., Japan's fourth-largest listed bank, surged 10 percent on the U.S. Treasury's plan to purchase a variety of securities to relieve frozen credit markets. Honda Motor Co., the nation's No. 2 automaker, jumped 5.1 percent. Mitsubishi Corp. led gains by trading houses and resource producers as crude oil traded near a two-week high.

``The emergency relief measures have stopped the market freefall induced by panicking investors, but it's not providing any economic support, so the impact will be limited,'' said Takashi Kamiya, who helps oversee $16 billion as chief economist at T&D Asset Management Co. in Tokyo. ``I think we are approaching a point where Japanese and other Asian markets are going to decouple from the U.S.''

The Nikkei 225 Stock Average gained 169.73, or 1.4 percent, to 12,090.59 at the close of trading in Tokyo. The broader Topix index climbed 19.57, or 1.7 percent, to 1,168.69. The benchmark has advanced 6.5 percent in the past two sessions, the biggest back-to-back rally since Jan. 25.

The Treasury submitted revised guidance to Congress on its plan today, and now proposes buying what it terms troubled assets, according to a document obtained by Bloomberg News and confirmed by a congressional aide. The credit crisis, sparked by the collapse of the U.S. mortgage market, has led to more than $500 billion in losses and writedowns at global financial companies.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.