Japan Stocks Rally on Capital Boost Plan; Mitsubishi UFJ Gains

By Masaki Kondo

Sept. 19 (Bloomberg) -- Japanese stocks rose, paring a weekly tumble, after central banks and regulators announced plans to boost capital and liquidity in markets devastated by failures of global financial companies.

Mitsubishi UFJ Financial Group Inc., Japan's largest listed bank, surged 7 percent, while Nomura Holdings Inc., the nation's biggest brokerage, climbed 5.9 percent. Kawasaki Kisen Kaisha Ltd., Japan's third-biggest shipping company, surged 5.9 percent after transport fees for commodities rose the most in a month.

``It's worth noting regulators worldwide have started taking actions to stabilize financial markets, most importantly in the U.S.,'' Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., said in an interview with Bloomberg Television.

The Nikkei 225 Stock Average climbed 295.04, or 2.6 percent, to 11,784.34 as of 9:30 a.m. in Tokyo. The broader Topix index rose 32.52, or 3 percent, to 1,130.20, easing a 4 percent weekly decline. Almost two stocks gained for each that fell on the Topix.

U.S. stocks rallied the most in six years as a government plan to buy bad debt, alongside steps by regulators to curb bets against banks and brokerages, eased concern the credit crisis will deepen. That coincided with a plan by the Bank of Japan and the Federal Reserve to offer as much as $60 billion to financial markets to ease a dollar shortage.

The bankruptcy of Lehman Brothers Holdings Inc., once the fourth-largest U.S. investment bank, and the U.S. government takeover of insurer American International Group Inc. had spurred banks to hoard dollars on concern more failures would follow.

Bank Rally

Mitsubishi UFJ leapt 7 percent to 827 yen, while Sumitomo Mitsui Financial Group Inc., the nation's third-biggest listed bank, added 7.9 percent to 628,000 yen. Nomura gained 5.9 percent to 1,261 yen.

Kawasaki Kisen jumped 5.9 percent to 723 yen, and market leader Nippon Yusen K.K. rose 5.1 percent to 767 yen. The Baltic Dry Index, a measure of shipping costs for commodities, advanced 2.1 percent, extending its increase to a third day.

Citizen Holdings Co., the world's biggest maker of mechanical watches by production volume, dropped 3.9 percent to 762 yen. Goldman Sachs Group Inc. cut its rating to ``neutral'' from ``buy'' and lowered its price estimate by 5.6 percent.

Nikkei futures expiring in December added 2.7 percent to 11,720 in Osaka and gained 2.5 percent to 11,725 in Singapore.

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