Japan Stocks Rise on Policy Expectations; Mitsui Fudosan Climbs

By Masaki Kondo and Satoshi Kawano

March 16 (Bloomberg) -- Japanese stocks rose in their biggest two-day gain in almost four months amid confidence central bank and government measures will ease lending and revive global economic growth.

Mitsui Fudosan Co. jumped 7.3 percent as a newspaper report the Bank of Japan will buy banks’ subordinated debt stoked speculation developers will have easier access to funding. Mitsubishi UFJ Financial Group Inc., which last month cut its annual profit target owing to soured stock investments, climbed 5.3 percent. Nintendo Co., the maker of the Wii game machine, added 2.4 percent after U.S. Treasury Secretary Timothy Geithner called on Group of 20 nations to increase stimulus spending.

The Nikkei 225 Stock Average climbed 134.87, or 1.8 percent, to 7,704.15 in Tokyo, the highest since Feb. 16. The gauge’s two-day, 7 percent climb was the most since Nov. 25. The broader Topix index added 17.39, or 2.4 percent, to 741.69.

“Should nothing be done, massive losses on stockholdings will discourage banks from lending, and businesses will suffer from increasingly difficult funding,” said Nobuyuki Kashihara, who helps oversee $26 billion at Tokyo-based Mizuho Asset Management Co. “The Bank of Japan’s purchase of subordinated loans is expected to prevent this downward spiral effect between finance and the economy.”

The Nikkei jumped 5.5 percent last week, its best since the period ended Nov. 28. The gauge is still down 13 percent in 2009 as a recession-sparked plunge in demand and lending triggered 13 bankruptcies among listed companies, including eight in the real estate industry. Nikkei members traded at 0.84 times their corporate net worth as of March 13, according to Nikkei Inc.

Bolstering Capital

The Bank of Japan is considering buying subordinated debt from banks as a means of shoring up lenders’ capital ratios, the Nikkei newspaper reported today. The central bank is also considering boosting its purchases of long-dated government bonds, the newspaper said on March 14.

Mitsui Fudosan, Japan’s largest property developer, leapt 7.3 percent to 1,012 yen, while closest rival Mitsubishi Estate Co. surged 7.6 percent to 1,050 yen. Orix Corp., whose business ranges from property development to corporate loans, jumped 9.9 percent to 2,275 yen, sending a gauge of non-bank financial companies to the biggest gain among the Topix’s 33 groups.

Mitsubishi UFJ, Japan’s largest listed bank, advanced 5.3 percent to 441 yen, and Sumitomo Mitsui Financial Group Inc., the No. 3, surged 6 percent to 3,020 yen. Shinsei Bank Ltd., Tokyo’s worst-performing bank stock in the past year, jumped 17 percent to 95 yen, the sharpest gain since its listing in February 2004.

2% Pledge

The number of unsold condominiums in Tokyo and surrounding areas fell to below 10,000 units in February for the first time since November 2007, as property companies offered discounts, the Real Estate Economic Research Institute today said. Akio Fukuda, a manager at the Tokyo-based research company, said a recovery in the nation’s condominium market is in sight.

Nintendo, the world’s biggest maker of handheld game players, climbed 2.4 percent to 29,530 yen in Osaka, while Toshiba Corp., Japan’s biggest chipmaker, rose 5.1 percent to 247 yen. Canon Inc., the world’s biggest digital-camera maker, surged 4.9 percent to 2,595 yen after Mito Securities Co. raised its rating on the stock to “neutral” from “neutral minus.”

G-20 finance ministers and central bankers said after a meeting over the weekend that they will take “whatever action is necessary” to restore the growth of the world’s economy. Geithner lobbied attendees to follow the U.S. in injecting fiscal stimulus equivalent to at least 2 percent of their economy’s gross domestic product this year.

Oil Tumbles

“The U.S.’s recommendation of more spending is sustaining investor optimism that additional fiscal measures will be introduced,” said Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. “People in the market have calmed down and started noticing authorities worldwide are doing what they can to revive the global economy.”

Inpex Corp., Japan’s biggest oil and gas explorer, slumped 4.6 percent to 644,000 yen. The Organization of Petroleum Exporting Countries left its production quotas unchanged at a weekend meeting. Oil prices tumbled as much as 5.2 percent to $43.85 per barrel in trading today.

Nikkei futures expiring in June added 2.3 percent to 7,680 in Osaka and rose 2.1 percent to 7,675 in Singapore.

To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net.