Japan Stocks Jump, Set for 4th Weekly Gain, on Recovery Hopes

By Masaki Kondo

April 3 (Bloomberg) -- Japanese stocks jumped, headed for their fourth weekly advance, on optimism that efforts by governments and regulators to halt the global recession are taking effect, helping send the yen to a five-month low.

Toyota Motor Corp., the world’s biggest automaker, rose 4.6 percent as world leaders agreed on measures to combat the recession and the weaker yen lifted the value of its overseas sales. Komatsu Ltd., which counts China as its fastest growing market, climbed 3.7 percent as China’s production expanded for the first time in six months. Mitsubishi UFJ Financial Group Inc. gained 3.4 percent on speculation a change in U.S. accounting standards will ease writedowns at financial companies.

The Nikkei 225 Stock Average climbed 138.74, or 1.6 percent, to 8,858.52 as of 9:48 a.m. in Tokyo, nearly erasing its loss on the year. The broader Topix index rose 14.51, or 1.8 percent, to 841.0. The Nikkei is set for a 2.1 percent gain this week, while the Topix is poised to add 1.9 percent.

“There’s growing optimism that the world economy has reached a bottom,” Yoshinori Nagano, a senior strategist at Daiwa Asset Management Co., which oversees about $96 billion, said in an interview with Bloomberg Television. “We’ve seen a fairly fast rally lately, and people will likely start getting wary of its pace.”

The Group of 20 policy makers, meeting in London yesterday, pledged more than $1 trillion to the International Monetary Fund to rescue recession-stricken nations. Leaders from the world’s most powerful countries called for stricter limits on hedge funds, credit-rating companies and risky investment by banks.

Weak Yen

Toyota jumped 7 percent to 3,690 yen, while Hondo Motor Co., climbed 4.6 percent to 2,860 yen. Sony Corp., the world’s No. 2 maker of consumer electronics, jumped 4.7 percent to 2,430 yen, the highest since Nov. 5. Olympus Corp., a maker of endoscopes that gets more than a quarter of its sales in Europe, jumped 7.6 percent to 1,930 yen.

The yen depreciated to as much as 100 to the dollar today for the first time since Nov. 4. Japan’s large manufacturers based their fiscal 2009 business plan on an average exchange rate of 97.18 yen per dollar, according to the Bank of Japan’s Tankan quarterly survey. A weaker yen increases the value of overseas sales for Japanese companies.

Komatsu increased 3.7 percent to 1,226 yen, the highest since Jan. 9. Hitachi Construction Machinery Co., which gets 14 percent of its sales in China, added 3.1 percent to 1,412 yen. Mitsui O.S.K. Lines Ltd., the world’s largest operator of iron- ore ships, jumped 5.5 percent to 541 yen.

Accounting Change

China’s Purchasing Manager’s Index rose to a seasonally adjusted 52.4 in March from 49 in February, exceeding the 50 threshold that divides expansion and contraction for the first time since September.

Mitsubishi UFJ, Japan’s biggest listed bank, rose 3.4 percent to 546 yen, while No. 2 Mizuho Financial Group Inc. jumped 3.9 percent to 216 yen. Nomura Holdings Inc., the nation’s largest brokerage, jumped 4.3 percent to 587 yen.

The U.S.’s Financial Accounting Standards Board agreed to relax fair-value, or mark-to-market, accounting that requires banks to revalue assets each quarter to reflect market prices. Writedowns and credit losses have amounted to $1.29 trillion at global financial companies since the collapse of the American home-loan market.

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