Japanese Stocks Advance on U.S. Manufacturing, Commodity Prices

Jan. 5 (Bloomberg) -- Japanese stocks rose for a second day, led by electronics makers and commodities traders after U.S. manufacturing climbed more than estimated and prices of oil and metals gained.

Sony Corp., Japan’s biggest exporter of televisions, added 1.6 percent. Mitsubishi Corp., the nation’s biggest trading company, climbed 3.1 percent, and Inpex Corp., its largest oil explorer, added 2.2 percent. Nippon Yusen K.K., Japan’s biggest shipping line, climbed 2.5 percent after a measure of cargo rates gained for the first time in a month.

“We can see from the positive U.S. economic data and rising commodity prices that there is a strong anticipation of a global self-sustaining recovery,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.

Japan’s Nikkei 225 rose 0.8 percent to 10,743.72 as of 9:31 a.m. in Tokyo, headed for its highest close since October 2008. The broader Topix index climbed 1 percent to 925.30, with about four stocks rising for each that fell.

The Topix climbed 5.6 percent last year, the lowest return among benchmark indexes for the world’s 40 largest stock markets. Stocks in the gauge are valued at an average of 36 times estimated earnings, compared with 18 times for the Standard & Poor’s 500 Index in the U.S. and 13 times for the Dow Jones Stoxx 600 Index in Europe.

The S&P 500 added 1.6 percent in New York yesterday after the Tempe, Arizona-based Institute for Supply Management said its factory index, a measure of U.S. manufacturing, rose to 55.9, the highest level since April 2006. The median forecast by economists was 54.3. Readings greater than 50 signal expansion.

Electronics, Commodities

Sony climbed 1.6 percent to 2,775 yen. Hitachi Ltd., a maker of industrial equipment which receives more than 40 percent of its revenue overseas, rose 0.7 percent to 288 yen.

Crude oil for February delivery rose 2.7 percent in New York yesterday, the highest close in more than 14 months, as freezing weather and improving global economies bolstered the outlook for fuel demand. Gold prices surged the most in two months, or 2 percent, and copper futures for March delivery climbed 1.8 percent to a 16-month high.

Inpex gained 2.2 percent to 731,000 yen. Mitsubishi Corp. jumped 3.1 percent to 2,389 yen and was the biggest contributor to the Topix’s advance. Itochu Corp., Japan’s No. 4 trading company by market value, added 3.3 percent to 717 yen.

Shipping lines gained the most among the 33 industry groups in the Topix after the Baltic Dry Index, a benchmark for commodity cargo rates, added 4.5 percent yesterday in London, the first increase since Dec. 4. Nippon Yusen climbed 2.5 percent to 293 yen. Mitsui O.S.K. Lines Ltd., the operator of the world’s largest merchant fleet, added 2.6 percent to 505 yen. Kawasaki Kisen Kaisha Ltd. advanced 3 percent to 277 yen.