Japan Stocks Rise as Higher Oil Lifts Resource Firms, Traders

By Masaki Kondo

Jan. 19 (Bloomberg) -- Japan’s stocks rose for a second day as higher commodities prices lifted resources shares, while the weaker yen boosted the earnings outlook for electronics makers.

Inpex Corp., the nation’s largest oil and gas explorer, advanced 3 percent after the oil price climbed on Jan. 16. Mitsubishi Corp., a Japanese trading company that gets more than half its profit from commodities, rose 4.9 percent after prices of metals also gained. Funai Electric Co., which counts North America as its biggest market by sales, added 4.3 percent after the local currency depreciated to the weakest level in 10 days. Toshiba Corp. leapt 6 percent on a newspaper report it will build two nuclear-power plants for U.S.-based NRG Energy Inc.

“The weaker yen and the resilience of the U.S. market will likely prompt investors to snap up exporters,” Seiji Arai, a strategist at Mitsubishi UFJ Securities Co., said in an interview with Bloomberg Television. “As the U.S. market will be closed on Monday, most people in Tokyo will stay on the sideline today.”

The Nikkei 225 Stock Average climbed 56.37, or 0.7 percent, to 8,286.52 as of 9:55 a.m. in Tokyo. The broader Topix index rose 4.52, or 0.6 percent, to 822.41, with 24 of its 33 industry groups advancing. In New York, the Standard & Poor’s 500 Index advanced for a second day on Jan. 16, gaining 0.8 percent.

Crude oil for February delivery jumped 3.1 percent, the most since Jan. 5, to $36.51 a barrel in New York on Jan. 16. Copper futures climbed 5.1 percent, the sharpest gain in seven days, while gold advanced 4 percent, breaking a four-day losing streak. Oil fell as much as 1.4 percent today.

Dividend Yields

Inpex gained 3 percent to 715,000 yen. Mitsubishi, Japan’s largest trading company by market value, leapt 4.9 percent to 1,318 yen, while closest competitor Mitsui & Co. rose 4.2 percent to 941 yen. Mining companies were the second-biggest winners among the Topix groups after insurers.

The Nikkei had fallen 7.1 percent from the beginning of this year through Jan. 16, after posting a record 42 percent tumble in 2008. The benchmark’s members pay annual dividends worth 2.67 percent of their share prices, more than twice the returns on 10-year government bonds.

“The dividend yield is still attractive,” Shoji Hirakawa, Tokyo-based chief strategist at UBS AG, wrote in a report dated Jan. 16. “Even if profit falls sharply, dividend growth is often maintained in the initial year of an earnings deterioration phase.”

Funai jumped 4.3 percent to 2,195 yen in Osaka trading, while Honda Motor Co., which gets more than half of its profit from North America, gained 3 percent to 2,070 yen.

Nuclear Reactors

The yen depreciated to as much as 91.30, the weakest level since Jan. 9, from 90.46 at the close of stock trading on Jan. 16. A weaker yen boosts the value of overseas sales for Japanese companies when converted into local currency.

Toshiba, Japan’s biggest supplier of nuclear reactors, leapt 6 percent to 409 yen. The company will build two nuclear- power plants in Texas worth as much as 800 billion yen ($8.8 billion) for Princeton, New Jersey-based NRG Energy, the Yomiuri said today.

Mitsui Sumitomo Insurance Group Holdings Inc. jumped 3.4 percent to 2,580 yen, and Aioi Insurance Co. surged 5.3 percent to 435 yen. Nissay Dowa General Insurance Co. was unchanged at 488 yen. The insurers will announce a merger as early as this week, the Nikkei said today. The merger would create the nation’s biggest casualty insurer with annual sales of 2.7 trillion yen, the report said.

Nikkei futures expiring in March added 0.5 percent to 8,280 in Osaka and Singapore.

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