Japanese Stocks Advance for Third Day After Italy Announces Austerity Plan

By Norie Kuboyama and Toshiro Hasegawa - Dec 5, 2011 7:38 AM GMT+0700

Japanese stocks extended the biggest weekly gain in two years after the Italian premier announced 30 billion euros ($40 billion) of austerity and growth measures, boosting optimism Europe’s debt crisis would be contained.

Nissan Motor Co. (7201), a carmaker that gets about 80 percent of its revenue overseas, rose 1 percent. Inpex Corp., the nation’s largest oil explorer by market value, climbed 1.4 percent after oil and metals prices advanced. Fast Retailing Co., Asia’s largest clothing chain, gained after a drop in November same- store sales was smaller than in the previous month.

The Nikkei 225 Stock Average (NKY) rose 0.4 percent to 8,673.66 as of 9:24 a.m. in Tokyo. The broader Topix climbed 0.2 percent to 745.83, with about twice as many shares advancing as falling.

Futures on the Standard & Poor’s 500 Index rose 0.6 percent today. The S&P 500 index fell less than 0.1 percent on Dec. 2, wiping out an early rally, as a drop in the jobless rate to a two-year low wasn’t enough to extend the biggest weekly advance since March 2009.

Italian Prime Minister Monti will present his plan to lawmakers today after his Cabinet approved the package ahead of schedule yesterday. The package, which includes more than 12 billion euros in spending cuts, will force workers to delay retirement, resurrect a tax on first homes, crackdown on tax evasion and open up closed professions.

Also today, German Chancellor Angela Merkel meets French President Nicolas Sarkozy to advance a plan for stricter enforcement of the region’s deficit rules that will be presented to European Leaders at a summit on Dec. 8.

To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net;

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