Stocks, Bonds & Forex Trading
Source: www.bloomberg.com

By Masaki Kondo

Jan. 27 (Bloomberg) -- Japanese stocks jumped the most in six weeks as U.S. economic data and eased concern a recession in the world’s largest economy will deepen.

Toyota Motor Corp. and Honda Motor Co. leapt more than 6 percent after U.S. home sales unexpectedly gained and an aide to President Barack Obama said bailout funds will be directed to consumers. Kawasaki Kisen Kaisha Ltd. surged 9.9 percent after commodity shipping fees rose for a fifth day. Mizuho Financial Group Inc., Japan’s No. 2 listed bank, soared 6.3 percent after Barclays Plc said it won’t need further capital increases, lifting optimism turmoil in global financial markets is subsiding.

“Thanks to once-in-a-century measures from governments worldwide, the global economy will likely be better next year than this year,” said Yoshinori Nagano, a senior strategist at Tokyo-based Daiwa Asset Management Co., which oversees about $96 billion. “Barclay’s announcement was seen as a positive surprise and eased pessimism in the financial sector.”

The Nikkei 225 Stock Average advanced 316.14, or 4.1 percent, to 7,998.28 as of 12:37 p.m. in Tokyo, its first gain in three days. The broader Topix index rose 30.85, or 4 percent, to 799.13, with all of its industry groups climbing. Both gauges jumped the most since Dec. 15.

The Nikkei dived by a record 42 percent last year as Japan, the U.S. and Europe sank into simultaneous recessions, and the gauge has lost another 10 percent this year. Japanese Prime Minister Taro Aso has pledged to lift his country from its first recession since 2001 by spending 10 trillion yen ($112 billion), while Obama has proposed an $825 billion economic package.

The tumble in shares has driven up the average dividend yield on the Nikkei’s members to 2.79 percent as of yesterday, more than twice the returns on 10-year Japanese government bonds.

Unexpected Gains

Toyota, the world’s biggest automaker, jumped 6.5 percent to 2,935 yen, breaking a four-day losing streak, while Honda, which gets about half its sales in North America, added 7.8 percent to 2,095 yen. Nissan Motor Co. climbed 6.5 percent to 294 yen.

U.S sales of existing homes climbed 6.5 percent last month, the National Association of Realtors said yesterday, while economists had expected a decline. The Conference Board’s index of leading indicators, which points to the direction of the economy over the next three to six months, also rose against economist projections for a drop.

President Obama’s administration will direct more of the second half of a $700 billion financial rescue plan to open up credit for consumers and businesses and stem home foreclosures, press secretary Robert Gibbs said.

Metals Rally

The U.S. economic data boosted commodities prices, lifting a gauge of six metals by 5.5 percent in London yesterday. In New York, copper futures for March delivery soared as much as 11 percent to the highest level since Dec. 2.

Mitsubishi, Japan’s biggest trading company by value, leapt 7.6 percent to 1,255 yen, and Mitsui & Co., the No. 2, added 7 percent to 948 yen. Sumitomo Metal Mining Co., the nation’s second-largest copper smelter, surged 9.5 percent to 908 yen.

Kawasaki Kisen, Japan’s No. 3 shipping line, advanced 9.9 percent to 378 yen, while Mitsui O.S.K. Lines Ltd., the second biggest, jumped 6.7 percent to 588 yen. Market leader Nippon Yusen K.K. added 6.7 percent to 494 yen. The Baltic Dry Index, a measure of shipping costs for commodities, rose 1.5 percent yesterday, bringing its five-day advance to 15 percent.

Mizuho leapt 6.3 percent to 219 yen, and Mitsubishi UFJ Financial Group Inc., Japan’s top lender, climbed 5.5 percent to 483 yen. Banks contributed the most to the Topix’s gain.

Barclays, based in London, yesterday said its capital is sufficient to get through “these difficult markets.” The bank said in an open letter that its North American units acquired from Lehman Brothers Holdings Inc. are generating “record” revenue.

Nikkei futures expiring in March leapt 5.3 percent to 7,990 in Osaka and rose 5.3 percent to 7,990 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
Last Updated: January 26, 2009 22:56 EST