Japanese Stocks Advance on Policy Expectations, Machine Orders

By Masaki Kondo

Feb. 9 (Bloomberg) -- Japanese stocks rose on speculation a surge in unemployment will push the U.S. government to expedite recovery plans, and after domestic machinery orders fell less than estimated.

Honda Motor Co., which gets more than half of its profit from North America, advanced 2.2 percent on optimism the U.S. Congress will soon pass an economic stimulus plan and as the yen weakened against the dollar. Komatsu Ltd., the world’s No. 2 maker of earthmoving equipment, surged 4.3 percent. Nomura Holdings Inc., Japan’s largest securities firm, plunged 5.8 percent after saying it may sell new shares to replenish capital.

The Nikkei 225 Stock Average climbed 101.45, or 1.3 percent, to 8,178.07 as of 9:02 a.m. in Tokyo. The broader Topix index rose 7.95, or 1 percent, to 798.79.

“Governments and central banks have implemented a number of measures that have started taking effect,” said Chisato Haganuma, a Tokyo-based strategist at Nomura Securities Co., said in an interview with Bloomberg Television. “The rising unemployment rate is negative, but it shows companies are making efforts to reduce costs.”

The Nikkei sank by a record 42 percent last year as the world’s biggest economies sank into recession, and the gauge lost another 9.8 percent in January, the sharpest monthly slump since October.

The U.S. jobless rate jumped to 7.6 percent last month from 7.2 percent in January, the Labor Department reported on Feb. 6. The Senate delayed a vote on a stimulus package after lawmakers failed to agree on how to cut the more than $900 billion measure. The House has already passed an $819 billion version of the plan.

Orders for Japanese machinery fell 1.7 percent in December from November, the Cabinet Office said today before markets opened. Economists had estimated an 8.6 percent tumble.

Weakening Yen

The yen weakened against the dollar to as much as 92.42 today from 90.91 at the close of Tokyo stock trading on Feb. 6. A weaker yen increases the value of overseas sales for Japanese companies.

Nomura may sell common stock valued at as much as 300 billion yen from Feb. 19, the company said on Feb. 6 after markets shut. Last month, Nomura posted a fourth-straight quarterly loss, prompting the brokerage to sell convertible bonds.

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