Japan Stocks Rise as Drop in Oil Eases Cost Concern; Sony Gains

By Masaki Kondo
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Sept. 12 (Bloomberg) -- Japan's stocks rose, headed for a weekly gain, after a drop in crude prices to a six-month low allayed concern fuel costs will hurt company earnings.

Mitsubishi Motors Corp., Japan's fifth-largest carmaker, added 2 percent, while Sony Corp. advanced 1.4 percent. Mitsubishi UFJ Financial Group Inc., Japan's largest listed bank, rose 1.6 percent on speculation a purchase of Lehman Brothers Holdings Inc. will relieve uncertainty in financial markets.

``A decline in crude prices is positive for the outlook for the global economy,'' Soichiro Monji, chief strategist at Tokyo- based Daiwa SB Investments Ltd., said in an interview with Bloomberg Television. ``Financials have been oversold and some investors are likely to snap them up.''

The Nikkei 225 Stock Average climbed 130.01, or 1.1 percent, to 12,232.51 as of 9:03 a.m. in Tokyo. The broader Topix index rose 9.78, or 0.8 percent, to 1,172.50, set for a weekly advance of 0.1 percent.

Yesterday, the Topix fell to the lowest since March 17, when the gauge reached a level not seen since June 2005.

Crude oil for October delivery fell 1.7 percent to $100.87 a barrel in New York yesterday, the lowest settlement since March 24. Oil has dropped by a third from a record on July 11 as high prices and slowing global economic growth reduce demand.

Japan's gross domestic product contracted an annualized 3 percent last quarter, the Cabinet Office reported before markets opened. That's wider than the 2.4 percent drop reported last month. The median estimate of 27 economists surveyed by Bloomberg News was for a 3.1 percent contraction.

Lehman, the fourth-biggest U.S. brokerage, entered into talks with potential buyers, people with knowledge of the situation said. Bank of America Corp. is among potential acquirers, the Wall Street Journal reported.

Warren Lichtenstein's Steel Partners proposed to buy Noritz Corp., which makes gas-fired baths and water heaters, for about 42.3 billion yen ($395 million). Steel Partners yesterday said it will acquire all the outstanding shares it doesn't already own in the Kobe, western Japan-based company for 1,025 yen apiece. Shares in Noritz were poised to jump.

Nikkei futures expiring in December added 1.2 percent to 12,210 in Osaka and gained 1 percent to 12,205 in Singapore.

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