Japanese Stocks Jump on Treasury Plan, Yen; Nippon Steel Rises

By Masaki Kondo

March 24 (Bloomberg) -- Japanese stocks climbed, sending the Topix index to a seventh-straight gain, after a U.S. Treasury plan to remove toxic assets from banks triggered a global rally in equities.

Mizuho Financial Group Inc., the bank with the biggest subprime-related writedowns in Asia, jumped 5.5 percent after the U.S. said it will finance as much as $1 trillion in purchases of distressed assets. Mazda Motor Corp., Japan’s second-largest car exporter, advanced 6.3 percent as the local currency weakened against the dollar and euro. Nippon Steel Corp. and JFE Holdings Inc. added at least 3.2 percent as they won price cuts for hard coking coal.

“Investors are riding a tide of euphoria over the U.S. plan,” Mamoru Shimode, chief equity strategist at Resona Trust & Banking Co. said in an interview with Bloomberg Television. “Whether $1 trillion will suffice or there will be willing sellers remains to be seen.”

The Nikkei 225 Stock Average climbed 189.60, or 2.3 percent, to 8,405.13 as of 9:49 a.m. in Tokyo. The broader Topix index rose 16.61, or 2.1 percent, to 808.17, set for the longest winning streak since Jan. 7. Yesterday, the Nikkei staged its biggest rally in 10 days as Treasury Secretary Timothy Geithner wrote about the asset-purchase plan in the Wall Street Journal.

The Nikkei has risen 8.6 percent in March through yesterday, set for the steepest monthly advance since April 2008, amid confidence that measures by central banks and governments will subdue the financial crisis and restore economic growth. The Nikkei’s price-to-book ratio, or the combined market value of its members versus their corporate net worth, rose above 0.9 times for the first time since Feb. 10, according to Nikkei Inc.

Stocks Rally

The Treasury, Federal Reserve and Federal Deposit Insurance Corp. will provide private investors with financing to buy illiquid loans and securities held by banks, the Treasury said yesterday. The Standard & Poor’s 500 Index soared 7.1 percent in New York, the most since Oct. 28. Europe’s Dow Jones Stoxx 600 Index gained 3 percent to the highest close since Feb. 19.

Mizuho, Japan’s No. 2 listed bank, rose 5.5 percent to 232 yen, and bigger competitor Mitsubishi UFJ Financial Group Inc. climbed 4.5 percent to 535 yen. Both stocks increased for a seventh day today, the longest stretch since at least July 2006.

‘Big Step Forward’

Tokio Marine Holdings Inc., Japan’s biggest casualty insurer, soared 3.1 percent to 2,635 yen. Orix Corp., the nation’s top non-bank financial company, leapt 8 percent to 3,650 yen, leading its peers to the biggest gain among 33 industry groups on the Topix.

Japanese Finance Minister Kaoru Yosano today told reporters that the Treasury plan is a “big step forward” and that it may help bolster global financial markets. Japan’s stock market hasn’t recovered enough to let the government ditch its equity- bolstering plan, he said.

Mazda, which derives more than a quarter of its overseas sales from Europe, soared 6.3 percent to 186 yen. Canon Inc., the world’s No. 1 digital-camera maker, added 4.2 percent to 2,875 yen and Sony Corp. rose 3.5 percent to 2,080 yen.

The Japanese currency depreciated against the dollar to as much as 97.35 from 96.18 at the 3 p.m. close of stock trading in Tokyo yesterday. The yen weakened versus the euro to 132.57, a level not seen since Oct. 21. A weaker local currency boosts the value of overseas sales for Japanese companies.

Nippon Steel, the world’s No. 2 producer of the alloy, advanced 4.8 percent to 282 yen, and rival JFE rose 3.2 percent to 2,280 yen. The companies negotiated a 57 percent cut in the price they pay BHP Billiton Ltd. for hard coking coal, two industry executives with knowledge of the deal said.

Japan Tobacco Inc., the world’s third-largest publicly traded cigarette maker, slumped 3.4 percent to 236,700 yen. Public broadcaster NHK reported the nation may ban smoking in hospitals, schools and government offices.

Nikkei futures expiring in June added 2.2 percent to 8,360 in Osaka and Singapore.

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