By Masaki Kondo
Dec. 9 (Bloomberg) -- Japanese stocks climbed after U.S. President-elect Barack Obama’s plan to boost infrastructure investment spurred a rally in commodities, outweighing a greater- than-estimated slump in Japan’s economy.
Inpex Corp., the nation’s largest oil explorer, added 6.3 percent, while copper producer Nippon Mining Holdings Inc. climbed 4.4 percent after prices for the metal rose the most in six weeks. Nippon Yusen K.K., Japan’s top shipping line, jumped 5.6 percent after transport fees for commodities rose for the first time in 14 days. Mitsui Fudosan Co. advanced 5.5 percent on a newspaper report Prime Minister Taro Aso is seeking measures to reinvigorate the domestic real estate market.
The Nikkei 225 Stock Average rose 135.22, or 1.6 percent, to 8,464.27 as of 9:42 a.m. in Tokyo. The broader Topix index rose 12.68, or 1.6 percent, to 824.76, with two shares rising for each that fell. Both gauges are down more than 40 percent this year.
“We are seeing a short-term bear rally,” Mamoru Shimode, chief equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television. “A rate cut and the weakening of the yen are needed for a larger, more sustainable gain in stocks.”
Obama said on Dec. 6 he will raise spending on roads, bridges and public spending, triggering a rally in commodities. 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.
Shipping Lines
Inpex gained 6.3 percent to 570,000 yen, while Mitsubishi Corp., which gets more than half its earnings from commodities, leapt 5.9 percent to 1,157 yen. Nippon Mining, Japan’s biggest copper producer, soared 4.4 percent to 307 yen.
Nippon Yusen climbed 5.6 percent to 494 yen, and closest rival Mitsui O.S.K. Lines Ltd. rose 4.3 percent to 489 yen. The Baltic Dry Index, a measure of shipping costs for commodities advanced 1.2 percent yesterday, the first gain since Nov. 18.
Mitsui Fudosan, Japan’s biggest real-estate company, surged 5.5 percent to 1,304 yen, while Mitsubishi Estate Co. added 6.2 percent to 1,294 yen. Sumitomo Realty & Development Co. rose 4.5 percent to 1,290 yen.
Aso yesterday asked Land Minister Kazuyoshi Kaneko to revive the domestic real estate market, the Sankei newspaper reported, without saying where it obtained the information. Possible measures include financial support to real estate companies and home buyers, the Japanese-language newspaper said.
Deterioration ‘Accelerating’
Japan’s gross domestic product contracted at an annual 1.8 percent pace in the three months ended Sept. 30, the Cabinet Office said today before markets opened, more than the 0.4 percent reported last month. Economists surveyed by Bloomberg had predicted a 0.9 percent decline.
“The GDP report confirms that the economy’s deterioration is accelerating,” Fumikazu Onishi, a Tokyo-based senior strategist at Nikko Cordial Securities Inc., said in an interview with Bloomberg Television.
Rengo Co., Japan’s biggest maker of cardboard boxes, tumbled 7.1 percent to 672 yen. UBS AG cut its rating on the stock to “sell” from “neutral,” citing a possible decline in prices.
Nikkei futures expiring in December added 1.4 percent to 8,490 in Osaka and gained 1.5 percent to 8,470 in Singapore.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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