Japan Stocks Rise on Earnings Reports, Valuations; Nissan Gains

By Masaki Kondo and Satoshi Kawano

Oct. 20 (Bloomberg) -- Japan's stocks rose on speculation corporate earnings will beat expectations and after declines made shares cheap.

Nippon Steel Corp. and JFE Holdings Inc., Japan's biggest steelmakers, jumped more than 4 percent after the Nikkei newspaper said they may boost their annual earnings targets. Panasonic Corp. rose 6.6 percent on a report the company may beat its profit forecast owing to increased sales of televisions. Nissan Motor Co. gained 4.6 percent after a recent drop in its stock price pushed UBS AG to recommend buying the shares.

``Company earnings may not be as bad as we feared,'' said Ryuta Otsuka, a strategist at Toyo Securities Co. in Tokyo. ``The recent declines in the stock market have already priced in possible negative results.''

The Nikkei 225 Stock Average gained 72.64, or 0.8 percent, to 8,766.46 as of 9:36 a.m. in Tokyo. The broader Topix index advanced 8.62, or 1 percent, to 902.91. More than two shares climbed for each that fell on the Topix.

Nippon Steel jumped 4.4 percent to 330 yen, while JFE added 6.1 percent to 2,360 yen. Nippon Steel may raise its annual estimate of pretax profit to 520 billion yen ($5.12 billion) from 450 billion yen this month because of falling costs for materials and fuel and higher steel prices, Nikkei said today. JFE may post 510 billion yen in pretax profit, compared with its July forecast of 450 billion yen, the newspaper said, without saying where it got the information.

TV Sales

Panasonic, the world's largest maker of consumer electronics, jumped 6.6 percent to 1,599 yen. The Osaka-based company may report at least 220 billion yen in operating profit for the six months to Sept. 30, boosted by TV sales, the Nikkei said on Oct. 18. In April, the company forecast first-half profit will decline 9.1 percent to 200 billion yen.

Nissan, Japan's third-biggest automaker, gained 4.6 percent to 506 yen, while smaller rival Daihatsu Motor Co. advanced 4.9 percent to 946 yen. Mazda Motor Corp. rose 1.5 percent to 280 yen. The companies had their investment ratings boosted to ``buy'' from ``neutral'' by UBS, which cited recent price drops.

The Topix fell 20 percent in the month through Oct. 17, while Nissan declined 34 percent.

Nikkei futures expiring in December added 0.9 percent to 8,780 in Osaka and climbed 1.3 percent to 8,770 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.