Japan Stocks Rise on U.S. Stimulus Expectations, Bank Rates

By Masaki Kondo

Oct. 21 (Bloomberg) -- Japan stocks rose a third day on expectations the U.S. will introduce additional economic stimulus measures, boosting demand for Japanese-made products.

Honda Motor Co., which gets more than half its profit from North America, was poised to climb. Mizuho Trust & Banking Co. advanced 3.4 percent after a lending rate between banks fell the most in nine months. Mitsubishi Corp., which gets more than half its profit from commodities, was set to jump after oil rose.

``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 133.83, or 1.5 percent, to 9,139.42 as of 9:03 a.m. in Tokyo. The broader Topix index rose 12.87, or 1.4 percent, to 940.24.

Federal Reserve Chairman Ben S. Bernanke yesterday said lawmakers should consider new measures to improve access to credit for consumers and businesses. Stricter loan standards reduced spending for cars, driving U.S. auto sales down the most in 17 years last month and prompting Toyota Motor Corp. to offer no-interest loans in the country.

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 is starting to take effect.

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 dipped 0.4 percent to 9,050 in Osaka and gained 2.8 percent to 9,315 in Singapore.

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