Japan Stocks Jump on Commodities; Mitsui Fudosan Set to Climb

By Masaki Kondo

Nov. 25 (Bloomberg) -- Japanese stocks rose as a government rescue of Citigroup Inc. sent U.S. shares higher and a promised economic stimulus plan raised expectations demand for commodities will recover.

Mitsubishi Corp., which derives more than half its profit from commodities, was set to climb after oil and copper jumped more than 5 percent. Mitsubishi Motors Corp. advanced 4.4 percent after U.S. lawmakers pledged to pass a stimulus package for the world’s biggest economy. Mitsui Fudosan Co. and Mitsubishi Estate Co., Japan’s biggest developers, were poised to rise after UBS AG recommended buying the stocks.

The Nikkei 225 Stock Average climbed 118.79, or 1.5 percent, to 8,029.58 as of 9:05 a.m. in Tokyo. The broader Topix index rose 21.22, or 2.6 percent, to 823.91. Nikkei futures in Singapore rose 9 percent. In New York, the Standard & Poor’s 500 Index capped its biggest two-day rally since 1987 after the U.S. decided to protect Citigroup from losses on troubled mortgages.

“Investors are pleased with the Citigroup rescue and the subsequent rally in U.S. shares,” Mamoru Shimode, chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television.

About half of stocks in Asia trade at below their book value as almost $1 trillion in credit losses and writedowns battered financial firms and dragged the global economy into recession. U.S. congress will send President-elect Barack Obama an economic stimulus package worth between $500 billion and $700 billion as soon as he takes office, Senator Charles Schumer said on Nov. 23 on ABC’s “This Week” program.

Oil, Copper

Crude oil for January delivery climbed 9.2 percent to $54.50 a barrel in New York yesterday, the biggest one-day jump since Nov. 4 as the Citigroup rescue plan bolstered confidence banks will loosen lending and demand for raw materials will increase. Copper futures for March delivery rose 5.9 percent.

Citigroup received a government support package which injects $20 billion of capital and shields the bank from losses on $306 billion of troubled mortgages. The bank’s stock soared 58 percent yesterday, rebounding from last week’s 60 percent plunge.

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