Japan Stocks Jump a 3rd Day on Stimulus Plan Hopes; Honda Rises

By Masaki Kondo

Oct. 21 (Bloomberg) -- Japan stocks surged on speculation stimulus plans will jump-start economic growth in the U.S. and at home, and as oil prices rose a third day.

Honda Motor Co., Japan's second-biggest automaker, climbed 5.3 percent. Mizuho Financial Group Inc., the country's No. 2 listed bank, advanced 2.6 percent after a lending rate between banks fell the most in nine months. Mitsubishi Corp., which gets more than half its profit from commodities, jumped 6.1 percent.

``A decline in interbank lending rates eases concern about financial turmoil and boosts investors' appetite for stocks,'' Mamoru Shimode, chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television.

The Nikkei 225 Stock Average climbed 330.21, or 3.7 percent, to 9,335.80 as of 9:26 a.m. in Tokyo, bringing its three-day gain to more than 10 percent. The broader Topix index rose 31.89, or 3.4 percent, to 959.26. All but one of 33 industry groups on the Topix advanced.

Federal Reserve Chairman Ben S. Bernanke yesterday said lawmakers should consider new measures to improve access to credit for consumers and businesses. Tax cuts in a proposed economic stimulus package in Japan may reach 2 trillion yen ($19.7 billion), the Mainichi newspaper said today.

Honda, which gets about half its sales from North America, added 5.3 percent to 2,400 yen, while Panasonic Corp., the world's largest maker of consumer electronics, gained 5.8 percent to 1,727 yen. Canon Inc., which gets a third of its sales from the Americas, rose 5.2 percent to 3,450 yen.

Mizuho gained 2.6 percent to 356,000 yen, and Mitsubishi UFJ Financial Group Inc., Japan's largest listed bank, climbed 3.9 percent to 831 yen. Orix Corp., the nation's biggest non-bank financial company, jumped 6.5 percent to 13,010 yen.

Libor, Oil

The London interbank offered rate, or Libor, which banks charge each other for three-month loans in dollars, fell by 36 basis points to 4.06 percent, according to the British Bankers' Association, the biggest decline in nine months. That suggests efforts by central banks to unfreeze credit markets are starting to take effect.

Mitsubishi, Japan's largest trading house, rose 6.1 percent to 1,847 yen, as smaller rival Mitsui & Co. added 6.3 percent to 1,062 yen. Inpex Corp., Japan's largest oil and gas explorer, wasn't traded as orders to buy outnumbered those to sell.

Crude oil for November delivery extended its gain to a third day today, after rising 3.3 percent to $74.25 a barrel on the New York Mercantile Exchange yesterday. A $1 change in the price of a barrel of oil alters Mitsubishi's annual net income by 1 billion yen ($9.8 million), according to Mitsubishi UFJ Securities Co.

Nikkei futures expiring in December rose 2.6 percent to 9,330 in Osaka and gained 3 percent to 9,335 in Singapore.

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