Japanese stocks climbed, lifting the benchmarks to near eight-week highs, after Standard & Poor's raised its ratings on lenders including Mitsubishi Tokyo Financial Group Inc. and government reports fueled optimism that that the economy will extend its longest recovery since 1997. ``There is enormous amount of interest in investing in Japan now and that's probably going to continue,'' said Joji Maki, a Tokyo-based director at Baring Asset Management (Japan) Ltd. ``The key is the recovery in domestic economy and banks are on a steady recovery track.'' The Nikkei 225 Stock Average added 1.4 percent to 11,744.15 at the 3 p.m. close in Tokyo. The Topix index climbed 1.1 percent to 1168.96, with banks and computer-related shares contributing more than a third of the advance. Both benchmarks closed at their highest since April 30.
Elsewhere in Asia, Australia's S&P/ASX 200 Index lost 0.5 percent, led by News Corp., after Standard & Poor's said it will remove it from the nation's indexes if a planned move to the U.S. is approved by shareholders. The Morgan Stanley Capital International's Asia-Pacific Index, which tracks more than 900 stocks, rose 1.3 percent to 90.368. South Korea's Kospi index surged, led by computer-related shares such as Samsung Electronics Co., after gains in U.S. peers suggested that industry growth will be sustained. HSBC Holding Plc led an advance in Hong Kong after the Wall Street Journal said the Bank of Communications, China's fifth- biggest lender, agreed to sell its shares to the U.K.-based bank. All other benchmarks in the region rose, except in India and New Zealand. Sri Lanka's Colombo All Share Index was little changed.
Japanese Banks
Mitsubishi Tokyo, Japan's largest lender by market value, advanced 3.3 percent to 966,000 yen, while Mizuho Financial Group Inc., the country's largest bank by assets, climbed 3.3 percent to 444,000 yen. After the market closed yesterday, S&P raised the long-term debt-rating for Bank of Tokyo-Mitsubishi Ltd. and Mitsubishi Trust & Banking Corp. to A-, the highest rating among the eight lenders that were upgraded. Both banks are units of Mitsubishi Tokyo Financial. It's the first time New York-based S&P raised its ratings for six of the lenders, reflecting a turnaround in the finances of Japanese banks on the back of the longest period of economic expansion for the country since 1997. The country's top three lenders reported a combined 1.3 trillion yen ($12 billion) in net income in the fiscal year ended March 31, from a 3 trillion yen loss in the year earlier. They also said their bad loans totaled 7.4 trillion yen at the end of March, down 41 percent from a year earlier.
Rising Confidence
Canon Inc. led gains among computer-related shares after a government survey showed that large Japanese manufacturers were more optimistic about the economic outlook in the second quarter. NTT DoCoMo Inc. also advanced on a separate report that indicated expansion in service industries. Confidence at manufacturers with at least 1 billion yen of capital was at 8.9 points, according to a survey released by the Cabinet Office and the Ministry of Finance in Tokyo. A positive reading means more people were optimistic about conditions compared with the previous quarter.
The tertiary index, a measure of demand for services, rose 2.2 percent in April from March, the Ministry of Economy, Trade and Industry said in Tokyo before the market opened. That was better than the median forecast of a 1.6 percent gain by 34 economists in a Bloomberg News survey.
Canon, DoCoMo
Canon, the world's third-largest maker of digital cameras, climbed 2.1 percent to 5,720 yen. Tokyo Electron Ltd., the world's second-largest maker of semiconductor production equipment, added 5.8 percent to 5,990 yen. DoCoMo, Japan's largest cell phone company, rose 1.6 percent to 195,000 yen. Baring Asset's Maki said he prefers investing in shares of companies that generate much of their profit at home rather than exporters. Baring Asset Japan is a unit of Baring Asset Management in the U.K., which manages $33.5 billion in global assets. The S&P/ASX 200 declined 19.20 points to 3533.50, the biggest drop since May 10. News Corp., the world's fifth-biggest media company, sank 4.4 percent to A$12.58. Its limited voting shares tumbled 4.9 percent to A$11.60. News Corp. common and preferred shares represent about 7.3 percent of the benchmark's weighting. S&P's decision may sway some shareholders to vote against Rupert Murdoch's plan to shift News Corp.'s headquarters to the U.S., investors such as Trust Co.'s Jim Reid said yesterday. A date for the vote hasn't been set.
Rating Cut
News Corp.'s rating was cut to short-term ``marketperform'' from ``outperform'' by Brendan Lyons, an analyst at Goldman Sachs JBWere, citing S&P's stance. ``The outcome of the shareholders' vote isn't certain and that's partly why the shares are falling,'' said Lucinda Chan, head of Asian business at Macquarie Equities Ltd. in Sydney. ``Some investors who benchmark against the index may also be anticipating the eventual removal of News Corp. and are selling ahead of that.''
The Kospi advanced 3.3 percent to 763.13, its biggest advance since June 7. Samsung Electronics, the world's second- largest semiconductor maker, rose 4.6 percent to 469,500 won. The shares have dropped from a record close of 637,000 won in April. LG Electronics Inc. climbed 4.1 percent to 53,100 won. Shares of South Korea's second-largest electronics maker have lost 35 percent since reaching a high this year on April 22. The Korea Electrical & Electronic Appliance Index, which includes Samsung Electronics among its 73 members, sank 22 percent this quarter until yesterday, compared with the Kospi's 16 percent drop. It was the fifth-worst performer among 19 groups during the period.
Nasdaq Advances
In the U.S., the Nasdaq Composite Index, which gets 40 percent of its value from computer companies, added 1.4 percent. The Philadelphia Semiconductor Index, which tracks 18 global chip- related stocks, climbed 2.1 percent, extending Tuesday's 3.5 percent jump. Hong Kong's Hang Seng Index surged 2.5 percent to 12,151.05, set for its biggest advance in two weeks. HSBC, Europe's biggest lender by market value, added 1.3 percent to HK$116. Bank of Communications agreed to sell as much as 20 percent of its shares to HSBC, the Journal said on its Web site, citing an interview with Li Fuan, deputy director of the China Banking Regulatory Commission. ///www.bloomberg.com