April 10 (Bloomberg) -- Japanese stocks rose after fewer Americans sought unemployment insurance and U.S.-based Wells Fargo & Co. reported a record quarterly profit, lifting optimism a recession in the world’s biggest economy is abating.
Sony Corp., which gets a quarter of its sales from the U.S., advanced 4.2 percent as White House chief economic adviser Lawrence Summers said the “free-fall” in the U.S. economy will end soon. Orix Corp., Japan’s top non-bank financial company, climbed 6.8 percent. Nippon Mining Holdings Inc. leapt 8.4 percent on a newspaper report the company’s loss may be less than it forecast. Sumitomo Mitsui Financial Group Inc. was poised to dive after posting its biggest loss in six years.
The Nikkei 225 Stock Average climbed 81.43, or 0.9 percent, to 8,997.49 as of 10:29 a.m. in Tokyo. The broader Topix index rose 6.91, or 0.8 percent, to 848.72. The Nikkei is set for a 2.8 percent advance for this week, a fifth weekly gain, while the Topix is poised to add 1.9 percent.
“Wells Fargo’s results boosted investor confidence in the outlook for the global financial system,” Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion, said in an interview with Bloomberg Television. “Cyclical shares will be broadly bought in Tokyo following the U.S. rally.”
The Nikkei yesterday erased this year’s loss amid expectations Japan’s government will use public money to support the equity market. The price-book ratio on the gauge rebounded yesterday to 1 for the first time since Jan. 9. The Standard & Poor’s 500 Index in the U.S. is still down 5.2 percent on the year.
Electronics, Cars
U.S. first-time claims for unemployment insurance fell by 20,000 to 654,000 in the week to April 4, the Labor Department reported yesterday. That was fewer than the 660,000 economists had estimated.
Sony, the world’s No. 2 maker of consumer electronics, climbed 4.2 percent to 2,585 yen, and its larger competitor Panasonic Corp. added 3 percent to 1,319 yen. Electronics makers as a group were the second-biggest contributor to the Topix’s advance, following car manufacturers.
Honda Motor Co., Japan’s second-largest automaker, gained 2.7 percent to 2,860 yen, while market leader Toyota Motor Corp. added 1.5 percent to 3,970 yen. Isuzu Motors Ltd., the nation’s largest truckmaker, rose 13 percent to 156 yen.
Nomura Holdings Inc. raised Japan’s auto industry to “neutral” from “bearish.” Separately, Morgan Stanley boosted its rating on Isuzu to “overweight” from “equalweight.”
Orix soared 6.8 percent to 4,850 yen, and Aiful Corp., Japan’s largest consumer lender by assets, increased 4.1 percent to 178 yen. Takefuji Corp. added 2.6 percent to 592 yen.
Stress Test
Wells Fargo, the No. 2 U.S. home lender, yesterday said first-quarter net income surged by half because of “strong” revenue from Wachovia Corp., which it acquired last year. The S&P 500 Banks Index leapt by a quarter, the most on record, while the overall market climbed 3.8 percent to a two-month high.
Government stress tests of U.S. banks are likely to indicate most don’t need more taxpayer money, Federal Reserve Bank of Kansas City President Thomas Hoenig said. White House adviser Summers said conditions have eased in the credit markets and that the decline in the U.S. economy will end within the next few months.
Nippon Mining, Japan’s largest copper producer, leapt 8.4 percent to 452 yen. The company may report a net loss of about 42 billion yen for the 12 months ended March 31, less than its 57 billion-yen projection, the Nikkei newspaper said today.
Kawasaki Kisen Kaisha Ltd., Japan’s No. 3 shipping line, advanced 4 percent to 392 yen, while Mitsui O.S.K. Lines Ltd. climbed 4.4 percent to 568 yen. The Baltic Dry Index, a measure of shipping costs for commodities, rose 1 percent yesterday in London, the first gain since March 10.
Bank Slump
Bank shares weighed on the market. Mizuho Financial Group Inc., the nation’s second-largest listed bank, dived 8.2 percent to 201 yen and Mitsubishi UFJ Financial Group Inc., the biggest, slumped 3.1 percent to 506 yen.
Sumitomo Mitsui, Japan’s No. 3 listed bank by assets, wasn’t traded as orders to sell outnumbered those to buy. The lender lost 390 billion yen ($3.88 billion) in the year to March 31, it said yesterday. Analysts had expected a profit. To shore up capital, the company prepared to sell as much as 800 billion yen of common shares.
Nikkei futures expiring in June added 0.8 percent to 9,000 in Osaka and gained 1.1 percent to 8,995 in Singapore.
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