Japan Stocks Rebound on U.S. Economy, Weaker Yen; Shippers Rise

By Masaki Kondo and Kotaro Tsunetomi

June 19 (Bloomberg) -- Japanese stocks rose, trimming a weekly slump, as U.S. economic reports indicated a recession in the world’s biggest economy is easing, helping drive gains in the dollar.

Canon Inc., which gets a third of its sales from the Americas, jumped 2.9 percent as the yen weakened versus the dollar. Mitsui O.S.K. Lines Ltd. and Kawasaki Kisen Kaisha Ltd., Japan’s second- and third-biggest shipping lines, rose at least 3 percent after Morgan Stanley raised their ratings. Sumitomo Realty & Development Co. led property stocks higher after Merrill Lynch & Co. boosted share prices estimates on the sector’s three-largest companies.

The Nikkei 225 Stock Average climbed 107.33, or 1.1 percent, to 9,811.05 as of 9:38 a.m. in Tokyo. The broader Topix index rose 11.95, or 1.3 percent, to 923.16.

“The yen’s depreciation will likely give a boost to exporters,” said Juichi Wako, a senior strategist at Tokyo- based Nomura Holdings Inc.

The Nikkei has lost 4.3 percent in the past four days and is poised for the steepest weekly drop since March 6. Companies on the gauge trade at 44.5 times estimated net income, compared with 15.5 times for the Standard & Poor’s 500 Index and 12.8 times for Europe’s Dow Jones Stoxx 600 Index.

In New York, the S&P 500 Index climbed 0.8 percent, breaking a three-day losing streak. The number of Americans collecting unemployment insurance dropped in the week to June 6 by the most since November 2001, the Labor Department said yesterday. The Conference Board, a New York-based non-profit organization, said its leading economic index rose 1.2 percent last month, exceeding the 1 percent gain estimated by economists.

Weaker Yen

The Japanese currency depreciated versus the dollar to as much as 96.73 today from 95.88 at the close of stock trading in Tokyo yesterday. A weaker yen boosts the value of overseas sales at Japanese companies.

Canon leapt 2.9 percent to 3,190 yen, breaking a four-day slide. Sony Corp., an electronics maker that gets a quarter of its sales from the U.S., added 2.6 percent to 2,540 yen.

Kawasaki Kisen jumped 4.4 percent to 431 yen, and Mitsui O.S.K. added 3 percent to 660 yen. Morgan Stanley raised Kawasaki Kisen to “equal weight” and Mitsui O.S.K. to “overweight.”

Sumitomo Realty, Japan’s third-biggest property company, jumped 4.1 percent to 1,771 yen, while bigger rival Mitsubishi Estate Co. climbed 4.3 percent to 1,640 yen. Mitsui Fudosan Co. advanced 3.6 percent to 1,684 yen. Merrill Lynch lifted its estimated share prices for the developers by at least 17 percent.

Nikkei futures expiring in September added 0.8 percent to 9,810 in Osaka and Singapore.

To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Kotaro Tsunetomi in Tokyo at ktsunetomi@bloomberg.net.