Japanese Stocks Rise on Economic View Report; Mitsui Gains

March 11 (Bloomberg) -- Japanese stocks advanced after the Nikkei newspaper reported the government may lift its outlook on the nation’s economy and on speculation iron ore prices will increase as demand grows.

Mitsui & Co., which owns a 15 percent stake in Vale SA’s major shareholder, climbed 3 percent after the Nikkei said Brazil-based Vale is seeking to raise iron-ore prices. Mitsui O.S.K. Lines Ltd., Japan’s largest operator of iron-ore ships, rose 2.3 percent. Sony Corp., which gets 71 percent of its sales outside Japan, advanced 2.7 percent as the yen fell against the dollar. Shinsei Bank Ltd. slid 1.9 percent after the Financial Times said it decided not to merge with Aozora Bank Ltd.

“The economy is undoubtedly in the midst of mild recovery,” said Mitsushige Akino, who oversees the equivalent of $450 million at Tokyo-based Ichiyoshi Investment Management Co. “Manufacturers’ earnings are improving thanks to the resilience of emerging economies.”

The Nikkei 225 Stock Average climbed 0.9 percent to 10,653.53 as of 10:13 a.m. in Tokyo. The broader Topix index rose 0.9 percent to 930.75 with almost six times as many shares gaining as falling.

The Topix has increased 2.2 percent for the past four days, set for a third-straight weekly gain, as a lower-than-estimated U.S. unemployment rate boosted investor confidence in a U.S. economic recovery. The average daily value of stocks traded in Tokyo dropped 16 percent this week from the 12-month mean as investors awaited the settlement of Nikkei 225 futures and options due tomorrow.

Sony, Nintendo

The Japanese government will probably upgrade its overall assessment on the nation’s economy for the first time since July, the Nikkei said today, without identifying its source of information. The report is expected to say the economy is making a “steady recovery” as rising exports to China drove growth in production, the newspaper said.

Sony, the maker of the PlayStation 3 game machine, jumped 2.7 percent to 3,465 yen. Nintendo Co., the world’s biggest maker of handheld game players climbed 1.4 percent to 27,890 yen.

The yen weakened to as low as 90.82 against the dollar from 90.10 at the 3 p.m. close of Tokyo stock trading yesterday, while depreciating to 124.00 per euro from 122.53. A weaker yen boosts the value of overseas sales at Japanese companies when converted into their home currency.

Mitsui O.S.K., Japan’s No. 2 shipping line, advanced 2.3 percent to 623 yen. Smaller rival Kawasaki Kisen Kaisha Ltd. rose 1.4 percent to 352 yen after the Nikkei said its container- ship business may have a narrower loss in the year to March 2011. Shipping companies collectively posted the steepest climb among the Topix’s 33 industry groups.

Trading Houses

The Baltic Dry Index, a measure of shipping costs for commodities, rose 0.6 percent in London yesterday.

Mitsui, Japan’s No. 2 trading house by market value, gained 3 percent to 1,549 yen. Itochu Corp., which holds interest in a Brazilian iron-ore producer, climbed 2.4 percent to 781 yen.

Vale, controlled by Valepar SA, is seeking to raise contract iron-ore prices by more than 90 percent in negotiations with Japanese steelmakers, the Nikkei reported today. Vale, the world’s biggest producer of the raw material used to make steel, has proposed increasing the price for the April-June period, Nikkei said.

JFE Holdings Inc., Japan’s second-biggest steelmaker, fell 1.1 percent to 3,460 yen and was the heaviest drag on the Topix. Smaller rival Kobe Steel Ltd. dropped 0.6 percent to 180 yen.

Shinsei slumped 1.9 percent to 102 yen. The bank concluded a planned merger with smaller rival Aozora Bank is no longer necessary and is planning to raise about $830 million, the Financial Times reported. Aozora rose 0.8 percent to 121 yen.

At 11 a.m. Tokyo time, China’s government is scheduled to release its reports on the nation’s consumer-price index, retail sales and industrial production.