Japan Stocks Climb as Bargains Emerge, Yen Weakens; Isuzu Gains

By Patrick Rial

Nov. 14 (Bloomberg) -- Japanese stocks climbed as investors snapped up shares trading near the cheapest valuations on record, the yen weakened and expectations mounted a financial summit this weekend will produce policies to stabilize markets.

Isuzu Motors Ltd., which saw its valuation slump to less than 3 times trailing earnings last month, soared 7.6 percent. Kawasaki Heavy Industries Ltd., which is selling rail cars to New York's subway operator, soared 6.1 percent after the yen dropped from two-week highs against the dollar and euro. Mizuho Financial Group Inc. rose 5.9 percent ahead of an emergency meeting of world leaders to deal with the financial crisis.

In New York, the Standard & Poor's 500 Index rallied in the final hour of trading to close 6.9 percent higher, as a rebound in oil prices boosted shares including Exxon Mobil Corp.

The Nikkei 225 Stock Average gained 339.88, or 4.1 percent, to 8,578.52 as of 9:15 a.m. in Tokyo. The broader Topix index climbed 35.14, or 4.2 percent, to 872.67.

``There wasn't any specific reason for the U.S. to climb, but it seems more that investors are doing some massive short covering,'' Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages about $53 billion, said in an interview with Bloomberg Television. ``The expectations have been fairly low for the summit, but investors are looking at the possibility that some concrete policy will emerge.''

Leaders from the Group of 20 nations will begin a weekend meeting in Washington later today. The meeting is being held to coordinate government responses to the worst financial crisis in 80 years. European leaders including French President Nicolas Sarkozy and British Prime Minister Gordon Brown have called for restructuring the international regulatory system to deal with the credit crisis.

Japanese shares also climbed after the yen weakened to 97.68 versus the dollar, from 95.62 at the close of trading yesterday. Against the euro, the yen dropped to as low as 125.08, from 119.23. A weaker yen increases the value of Japanese exporters' dollar-denominated sales when converted into local currency.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.