Japan Machinery Stocks Rise on China Growth Bets; KDDI Declines

By Masaki Kondo

April 22 (Bloomberg) -- Japanese machinery shares rose after Caterpillar Inc. said China’s stimulus plan is boosting demand, while KDDI Corp. led a decline by telecommunications shares.

Komatsu Ltd., which counts China as its fastest growing market, jumped 2.5 percent, while closest rival Hitachi Construction Machinery Co. added 1.4 percent. Elpida Memory Inc., Japan’s top maker of computer-memory chips, surged 16 percent after saying it plans to raise prices. KDDI, Japan’s No. 2 mobile-phone carrier, dropped 3.9 percent after Deutsche Bank AG said the company’s growth is slowing.

“Investors’ appetite for stocks has somewhat recovered,” Hiroichi Nishi, general manager at Nikko Cordial Securities Co., said in an interview with Bloomberg Television. “We’d like to see more positive news to bring investors back.”

The Nikkei 225 Stock Average climbed 37.75, or 0.4 percent, to 8,749.08 as of 9:47 a.m. in Tokyo. The broader Topix index rose 3.91, or 0.5 percent, to 834.63, with almost the same number of stocks rising and falling.

Shares climbed as Japan’s exports fell at a slower pace in March, ending a four-month stretch of record drops. Overseas shipments dropped 45.6 percent from a year earlier, the Ministry of Finance said today before markets opened, compared with February’s unprecedented 49.4 percent tumble.

Komatsu added 2.5 percent to 1,247 yen, while Hitachi Construction advanced 1.4 percent to 1,334 yen. Kubota Corp., Asia’s top tractor maker, climbed 2 percent to 606 yen.

U.S.-based Caterpillar, the world’s biggest maker of construction machinery, posted first-quarter profit of 39 cents a share, surpassing analysts’ average estimate of 5 cents a share. Chief Executive Officer Jim Owens said China’s stimulus spending may benefit the company this year and set the stage for growth in 2010.

Elpida soared 16 percent to 1,264 yen. The company plans to raise prices by as much as 50 percent next month after industry- wide production cuts eased a glut, President Yukio Sakamoto said in an interview yesterday.

KDDI dived 3.9 percent to 446,000 yen, while Nippon Telegraph & Telephone Corp., the nation’s biggest phone provider, sank 2.2 percent to 3,640 yen. Kenji Nishimura, an analyst for Deutsche Bank, yesterday lowered his price estimate on KDDI by 16 percent to 525,000 yen, citing slowing growth.

Nikkei futures expiring in June dipped 0.2 percent to 8,750 in Osaka and added 0.1 percent to 8,750 in Singapore.

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