Japanese Stocks Rise as Financial Concern Eases; Suzuki Drops

By Masaki Kondo

Sept. 12 (Bloomberg) -- Japanese stocks rose, led by banks, on speculation a purchase of Lehman Brothers Holdings Inc. will ease uncertainty in financial markets.

Resona Holdings Inc., the nation's fourth-biggest lender, leapt 12 percent, the most in a year. Kawasaki Kisen Kaisha Ltd. led gains by shipping lines as recent declines made their shares cheap relative to earnings. Suzuki Motor Corp., which gets more than a third of its profit from Asia outside Japan, dropped 4.7 percent after China's government said the nation's industrial production grew at the slowest pace in six years.

``Considering Lehman's failure would lead to social instability, a possible purchase of the U.S. brokerage has eased the sense of crisis among investors,'' said Yoshihiro Ito, a Tokyo-based senior strategist at Okasan Asset Management Co., which oversees about $9.3 billion.

The Nikkei 225 Stock Average climbed 112.26, or 0.9 percent, to close at 12,214.76 in Tokyo. The broader Topix index rose 14.48, or 1.3 percent, to 1,177.20, with almost three stocks gaining for each that slumped on the gauge. The Nikkei ended the week little changed, while the Topix rose 0.5 percent.

Lehman, the fourth-biggest U.S. brokerage that has lost more than 70 percent of its value this month, 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 on its Web site.

The Nikkei and Topix briefly lost ground in the afternoon session after China's statistics bureau said the nation's industrial production rose 12.8 percent last month from a year earlier, the slowest pace since 2002. Economists had estimated a 14.5 percent advance.

Japan's Cabinet Office said today gross domestic product contracted an annualized 3 percent last quarter, wider than the 2.4 percent drop reported last month. Consumer spending, which accounted for about 60 percent of the nation's GDP, fell 0.5 percent, as prices rose faster than wages.

Nikkei futures expiring in December added 0.7 percent to 12,150 in Osaka and rose 0.6 percent to 12,155 in Singapore.

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