Japan Stocks Jump as Financial Concerns Ease; Shippers Advance

By Masaki Kondo

Jan. 29 (Bloomberg) -- Japanese stocks gained, driving the Nikkei 225 Stock Average to its longest winning streak in three weeks, on expectations central bank efforts to unlock credit markets will ease the global financial crisis.

Mitsubishi UFJ Financial Group Inc. jumped 4.4 percent on the U.S. Federal Reserve’s plan to buy longer-term Treasury bonds. Sumitomo Mitsui Financial Group Inc. soared 10 percent even after third-quarter profit almost evaporated on bad-loan costs. Honda Motor Co., which gets more than half its profit in North America, jumped 4.1 percent after the yen fell against the dollar. Mitsui O.S.K. Lines Ltd., Japan’s No. 2 shipping line, gained 4.3 percent as cargo fees for commodities rose to a three-month high.

“The Fed’s resolve to take all possible measures boosted investor confidence in prospects for the global financial market,” Juichi Wako, a strategist at Tokyo-based Nomura Securities Co. said in an interview with Bloomberg Television. “With the weakening yen, we’ll see a shift to exporters from domestic-oriented shares.”

The Nikkei 225 gained ground for a third day, climbing 140.75, or 1.7 percent, to 8,247.04 as of 9:53 a.m. in Tokyo, set for its longest winning streak since Jan. 7. The broader Topix index rose 13.61, or 1.7 percent, to 817.94, with almost two stocks advancing for each that slumped.

The Nikkei lost a record 42 percent last year as writedowns and credit losses surpassed $1 trillion at global financial companies, and the gauge has lost another 6.9 percent in 2009. More than two thirds of the measure’s members fell below their net worth, according to data compiled by Bloomberg.

Fed Action

The Fed is ready to buy longer-term Treasury securities to encourage lending, the Federal Open Market Committee said in yesterday after meeting in Washington. The Fed left its benchmark interest rate as low as zero. New Zealand’s central bank today cut its key interest rate by 1.5 percentage points to a record low and said there’s room for further reductions.

Meanwhile, the U.S. House of Representatives passed President Barack Obama’s $819 billion stimulus package, aimed at lifting the economy out of recession. Obama and Japanese Prime Minister Taro Aso agreed to cooperate to solve the financial crisis and will try to meet “soon,” Japan’s government said today.

Mitsubishi UFJ, Japan’s biggest listed bank, jumped 4.4 percent to 525 yen, and closest rival Mizuho Financial Group Inc. surged 5.2 percent to 245 yen. Sumitomo Mitsui, the third largest, gained 10 percent to 3,710 yen, even after reporting more than a 99 percent plunge in third-quarter net income because of losses on stockholdings and mounting non-performing loans.

Currency Effect

The Fed’s announcement helped the dollar strengthen to as much as 90.75 yen in New York from 89.22 at the 3 p.m. close of stock trading in Tokyo yesterday. A weaker yen raises the value of repatriated overseas sales for Japanese companies.

Honda, Japan’s No. 2 automaker, leapt 4.1 percent to 2,285 yen, and Toyota Motor Corp., the biggest automaker globally, jumped 2.4 percent to 3,050 yen. Sony Corp. rose 3.7 percent to 1,903 yen, while Canon Inc., the world’s biggest digital camera maker, added 5.2 percent to 2,725 yen even after forecasting profit will fall to a decade low this year. Makers of electronics and cars were the second- and third-biggest contributors to the Topix’s rally, following banks.

Mitsui O.S.K. added 4.3 percent to 612 yen and market leader Nippon Yusen K.K. rose 2.6 percent to 517 yen. Kawasaki Kisen Kaisha Ltd. climbed 2.4 percent to 388 yen. The Baltic Dry Index, a measure of commodity shipping fees, added 1 percent yesterday to the highest level since Oct. 27.

Nikkei futures expiring in March gained 1.7 percent to 8,250 in Osaka and Singapore.

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