Japan Stocks Rise as Oil, Metal Prices Rebound; Astellas Slumps

By Masaki Kondo

Dec. 9 (Bloomberg) -- Japan stocks rose on speculation global stimulus plans will increase demand for commodities, overshadowing a greater-than-estimated slump in Japan’s economy.

Nippon Mining Holdings Inc., the nation’s largest copper producer, climbed 5.8 percent after prices for the metal rose the most in six weeks. Nippon Yusen K.K. jumped 6 percent as shipping fees for commodities gained for the first time in 14 days. Mitsui Fudosan Co. soared 9.3 percent after the Sankei newspaper said the government may try to reinvigorate the domestic real estate market. Drugmaker Astellas Pharma Inc. declined 6.7 percent on speculation so-called defensive shares will lag behind stocks that will benefit from government spending.

“Authorities across the globe are exerting every effort to stimulate economies in a coordinated manner,” said Yoshihiro Ito, senior strategist at Tokyo-based Okasan Asset Management Co., which oversees about $9.3 billion. “The global recession won’t be as deep as some fear.”

The Nikkei 225 Stock Average rose 66.82, or 0.8 percent, to close at 8,395.87 in Tokyo, paring an early gain of 2.1 percent. The broader Topix index added 5.86, or 0.7 percent, to 817.94, with almost the same number of stocks rising and falling.

U.S. President-elect Barack Obama said on Dec. 6 he will raise spending on public works, triggering a rally in metals and energy prices. China last month announced a 4 trillion yuan ($581 billion) stimulus package, and the Yomiuri newspaper said today Japan’s government may propose spending an extra 20 trillion yen ($216 billion) during the next three years to boost the economy.

Copper, Oil

Japan’s gross domestic product contracted at an annual 1.8 percent pace in the three months ended Sept. 30, the Cabinet Office said. That’s more than four times the number reported last month and twice what economists had estimated. The Nikkei has fallen 45 percent this year as Japan followed the global economy into recession.

Nippon Mining soared 5.8 percent to 311 yen, and Inpex Corp., Japan’s biggest oil and gas explorer, gained 7.1 percent to 574,000 yen. Nippon Sheet Glass Co. leapt 10 percent to 307 yen, the sharpest jump since Nov. 4.

Copper futures for March delivery added 9.1 percent yesterday, the biggest jump since Oct. 29, while crude oil for January delivery surged 7.1 percent to $43.71 a barrel, breaking a six-day losing streak. Oil has dropped 70 percent from a record $147.27 on July 11.

Nippon Yusen, Japan’s largest shipping line, climbed 6 percent to 496 yen, and closest rival Mitsui O.S.K. Lines Ltd. rose 6.2 percent to 498 yen. The Baltic Dry Index, a measure of shipping costs for commodities advanced 1.2 percent yesterday, the first gain since Nov. 18. The cargo gauge has plunged 93 percent this year as shipping slowed, and Nippon Yusen today said it would curtail its fleet expansion plan by up to 60 percent.

Real Estate

Mitsui Fudosan, the nation’s biggest real-estate company, surged 9.3 percent to 1,351 yen, while Mitsubishi Estate Co. added 8 percent to 1,317 yen. The Tokyo Stock Exchange REIT Index, which represents 40 real-estate investment trusts, climbed 7.3 percent, with DA Office Investment Corp. leading the advance with a 17 percent gain.

Prime Minister Taro Aso asked Land Minister Kazuyoshi Kaneko to revive the domestic real estate market, the Sankei reported today, without saying where it obtained the information. Possible measures include financial support to real estate companies and home buyers, the Japanese-language newspaper said.

Rengo Co., Japan’s biggest maker of cardboard boxes, tumbled 6.8 percent to 674 yen, the steepest decline since Oct. 30 and leading a slump in papermakers. UBS AG cut its rating on the stock to “sell” from “neutral,” citing a possible drop in product prices. The Topix Pulp & Paper Index has risen 56 percent since the broader gauge fell to a 24-year low on Oct. 27.

Defensive at Disadvantage

Papermakers posted the sharpest drop among 33 industry groups on the Topix today, followed by insurers, drugmakers, food producers and train operators.

“Assuming the economic policies will push the market into an uptrend, defensive stocks are at a disadvantage to those that will benefit from public works,” said Yoshihiro Okumura, who helps oversee the equivalent of $365 million at Tokyo-based Chiba-gin Asset Management Co.

Astellas, Japan’s second-biggest drugmaker, fell 6.7 percent to 3,750 yen, ending a four-day winning streak, while Japan Tobacco Inc., a cigarette maker that also produces frozen food, sank 7.5 percent to 322,000 yen, leading drops on the Nikkei. East Japan Railway Co. lost 2.3 percent to 671,000 yen.

Nikkei futures expiring in December added 0.4 percent to 8,400 in Osaka and rose 0.7 percent to 8,400 in Singapore.

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