By Masaki Kondo and Kotaro Tsunetomi
Sept. 17 (Bloomberg) -- Japanese stocks rebounded from a three-year low as investors snapped up companies whose earnings may withstand an economic slowdown.
Japan Tobacco Inc. jumped 6.3 percent, sending a gauge of food-related stocks to the sharpest gain in almost two years. Tokio Marine Holdings Inc., Japan's biggest insurance group, rose 5.3 percent after the U.S. government said it would take over insurer American International Group Inc. Shinsei Bank Ltd. sank to a record low after announcing the biggest potential loss among Japanese banks from Lehman Brothers Holdings Inc.'s collapse.
``Investors are reluctant to buy shares that are sensitive to economic shifts and are instead moving their funds to defensive stocks, such as food and drugmakers,'' said Kazuyuki Terao, who helps oversee about $1.7 billion as chief investment officer of RCM Japan Ltd. in Tokyo. ``The outlook for the global economy is remains hazy.''
The Nikkei 225 Stock Average rose 140.07, or 1.2 percent, to close at 11,749.79 in Tokyo. The broader Topix index rose 3.86, or 0.4 percent, to 1,121.43, after earlier gaining as much as 2.1 percent. Twenty of 33 industry groups on the Topix climbed.
The Federal Reserve Board, with support of the U.S. Treasury, invoked emergency powers to lend up to $85 billion to AIG to save the firm from collapse. Yesterday, the Nikkei sank 5 percent to the lowest since July 2005 after Lehman filed for bankruptcy and concern mounted that AIG would suffer a similar fate.
Nikkei futures expiring in December added 1.3 percent to 11,730 in Osaka and gained 1.2 percent to 11,735 in Singapore.
To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Kotaro Tsunetomi in Tokyo at ktsunetomi@bloomberg.net.
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