Japan Stocks Gain on U.S. Economy Optimism; Shipping Lines Jump

Jan. 27 (Bloomberg) -- Japanese stocks advanced for the first time in three days as U.S. economic indicators eased concerns of a deepening recession in the world’s biggest economy.

Toyota Motor Corp., the No. 1 automaker globally, and Honda Motor Co. jumped more than 4 percent after U.S. home sales and the Conference Board’s index of leading indicators unexpectedly rose. Mitsubishi Corp., a trading company that gets more than half its profit from commodities, climbed 5.3 percent after metal prices soared. Kawasaki Kisen Kaisha Ltd. surged 8.4 percent after shipping fees for commodities gained for a fifth day.

“There is optimism in the market the global economy will recover from the latter half of this fiscal year,” Mamoru Shimode, equity strategist at Deutsche Bank AG, said in an interview with Bloomberg Television. “That optimism may help the stock market push through the current downturn.”

The Nikkei 225 Stock Average advanced 187.68, or 2.4 percent, to 7,869.82 as of 9:54 a.m. in Tokyo. The broader Topix index rose 17.68, or 2.3 percent, to 785.96, with more than five stocks climbing for each that slumped.

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 11 percent in 2009. The tumble made shares cheaper, driving up the average dividend yield on the gauge’s members to 2.79 percent as of yesterday, more than twice the returns on 10-year government bonds.

Toyota jumped 4.5 percent to 2,880 yen, breaking a four-day losing streak, while Honda, which gets about half its sales in North America, added 4.4 percent to 2,030 yen. A gauge of automakers contributed the most to the Topix’s gain.

Unexpected Gains

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 index, which points to the direction of the economy over the next three to six months, also went against economist projections, rising 0.3 percent versus an estimated 0.2 percent drop.

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 5.3 percent to 1,228 yen, and Mitsui & Co., the No. 2, added 4.7 percent to 928 yen. Sumitomo Metal Mining Co., the nation’s second-largest copper smelter, surged 5.9 percent to 878 yen.

Kawasaki Kisen, Japan’s No. 3 shipping line, advanced 8.4 percent to 373 yen, while Mitsui O.S.K. Lines Ltd., the second biggest, jumped 5.8 percent to 583 yen. Market leader Nippon Yusen K.K. added 5.2 percent to 487 yen. The Baltic Dry Index, a measure of shipping costs for commodities, rose 1.5 percent yesterday, bringing its five-day advance to 13 percent.

Nikkei futures expiring in March leapt 3.6 percent to 7,860 in Osaka and rose by the same degree to 7,865 in Singapore.