Japan Stocks Advance on China Growth Optimism; Mazda Jumps

By Masaki Kondo

March 5 (Bloomberg) -- Japanese stocks advanced for a second day on speculation an expanded stimulus program in China will boost demand for resources and machinery.

Inpex Corp., Japan’s largest oil and gas explorer, climbed 4.1 percent after crude increased to a near six-week high. Komatsu Ltd., the world’s second-biggest maker of earthmoving equipment, jumped 3.9 percent. Mazda Motor Corp., the nation’s fourth-largest automaker, added 3.2 percent after the Japanese currency weakened, boosting its earnings prospects.

“People are keen to see how much more money China will pump into its economy,” Mitsushige Akino, who oversees about $615 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television. “If the country doubles its planned spending, the impact will be huge.”

The Nikkei 225 Stock Average climbed 45.54, or 0.6 percent, to 7,336.50 as of 9:03 a.m. in Tokyo. The broader Topix index rose 4.63, or 0.6 percent, to 736.67.

Yesterday, the Nikkei reversed to a gain in the afternoon after a former Chinese statistics bureau head told reporters Premier Wen Jiabao will announce a new economic package on top of a 4 trillion-yuan ($585 billion) spending plan. China’s parliament convenes its annual meeting today, and Wen will give his annual address to the nation’s legislature.

The Standard & Poor’s 500 Index climbed 2.4 percent in New York, breaking a five-day losing streak, while Europe’s Dow Jones Stoxx 600 Index leapt 3.9 percent, the most since Dec. 8.

Commodities, Yen

Speculation China’s economy will pick up steam drove up commodity prices. Crude oil for April delivery surged 9 percent to $45.38, the highest settlement since Jan. 26. Copper futures for May delivery leapt 5.6 percent.

The yen depreciated against the dollar to as much as 99.49 yesterday, the weakest level since Nov. 5, from 98.44 at the 3 p.m. close of stock trading in Tokyo.

The Finance Ministry today said Japanese companies cut spending last quarter at the fastest pace in a decade. Capital spending excluding software fell 18.1 percent in the three months to Dec. 31 from a year earlier, while economists had estimated a 15.3 percent drop.

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