Japanese Stocks Rise Toward One-Month High as G-20 Eases Europe Concern

By Jonathan Burgos - Oct 17, 2011 7:41 AM GMT+0700

Japanese stocks climbed, with the Nikkei 225 (NKY) Stock Average heading for its highest close in a month, after the Group of 20 finance chiefs meeting in Paris endorsed parts of a plan to contain Europe’s debt crisis.

Sumitomo Mitsui Financial Group Inc., Japan’s second- largest lender by market value, gained 1.6 percent. Nissan Motor Co., a carmaker that gets about 80 percent of its revenue overseas, advanced 2.1 percent after U.S. retail sales rose the most in seven months. Sony Corp., Japan’s biggest exporter of consumer electronics, jumped 4 percent after Sony Ericsson Mobile Communications AB beat analysts’ earnings estimates

“Investors are recovering their risk appetite,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. “We could see that G-20 countries would cooperate with European countries in tackling the debt crisis, which helped concern over the European crisis recede.”

The Nikkei 225 Stock Average increased 1.5 percent to 8,880.29 as of 9:30 a.m. in Tokyo, heading for its highest close since Sept. 2. The broader Topix gained 1.4 percent to 759.51, with about 10 times as many shares advancing as declining.

The Topix tumbled 17 percent this year through Oct. 14 amid concern the U.S. would fall into another recession while Europe’s crisis threatens to spread to the banking system. The slide has cut the price of shares on the index to 0.88 times estimated book value, near the lowest since March 2009.

G-20 Meeting

Futures on the Standard & Poor’s 500 Index added 0.4 percent today. The S&P 500 rose 1.7 percent in New York on Oct. 14, pushing the gauge to its biggest weekly gain since July 2009, after a report that showed retail sales exceeding economists estimates eased concern the world’s biggest economy will slow.

G-20 finance ministers and central banks concluded weekend talks in Paris, endorsing parts of an emerging plan to avoid a Greek default, bolster banks and curb contagion. They set an Oct. 23 summit of European leaders in Brussels as the deadline for it to be delivered.

Hurdles to overcome for an accord include resistance from bankers to a deeper restructuring of Greek debt as well as disagreements between Europe’s capitals over just how to multiply the firepower of their bailout fund and recapitalize financial institutions.

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.