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Japanese Stocks May Advance on U.S. Consumer Confidence Report
Dec. 12 (Bloomberg) -- Japanese stocks may rise after a measure of U.S. consumer confidence increased more than expected and oil dropped below $60 a barrel. Exporters such as Kyocera Corp. and Fuji Photo Film Co. may pace the advance.

Mizuho Financial Group Inc. may lead gains by financial stocks after the Tokyo Stock Exchange said it was the bourse's system that prevented the bank's brokerage unit from canceling a trading error last week.

``The U.S. is looking strong and that's going to give a tailwind to exporters,'' said Norihiro Fujito, a senior strategist at Mitsubishi UFJ Securities Co. in Tokyo. ``The stock exchange admitting that they were responsible for the trading error may also lure some buyers back from Mizuho and other financial stocks on the view that the financial burden on Mizuho will be limited.''

Nikkei 225 Stock Average futures expiring in March closed in Chicago at 15,535 on Dec. 9, a 0.7 percent premium to the 15,430 close in Osaka and 0.6 percent higher than 15,445 in Singapore. The Bank of New York Japan ADR Index advanced 1.6 percent.

The Nikkei last week lost 0.1 percent to 15,404.05. The Topix index rose 0.5 percent to 1591.23.

With less than three weeks left until the year-end, the Nikkei and the Topix are heading for their third straight annual gains. The Nikkei has advanced 34 percent so far, while the Topix has jumped 38 percent, the most since 1999.

FOMC, Tankan

Investors may refrain from taking large bets before the Federal Open Market Committee's interest-rate setting meeting in the U.S. on Dec. 13, and Bank of Japan's Tankan business confidence survey on Dec. 14, said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo.

The Fed has raised the benchmark U.S. interest rate by 3 percentage points since June 2004, to 4 percent, and economists surveyed by Bloomberg News expect another quarter-point increase when Fed policy makers next meet.

Confidence among Japan's largest manufacturers probably rose to 23, the highest level in a year, stoked by sustained growth in the world's second-largest economy, rising stock prices and exports, according to economists surveyed by Bloomberg News.

``With major events such as the FOMC and the Tankan, it's difficult to aggressively keep buying from here,'' said Nishi.

U.S. Consumption

U.S.-traded receipts of Kyocera, the world's largest maker of ceramic packaging used to protect finished microchips, advanced 1.4 percent from the closing price in Tokyo on Dec. 9, while American depositary receipts of Fuji Photo, the world's second-largest filmmaker, added 1.2 percent compared with their closing price in Japan last weekend.

In the U.S., all three key stock indexes rose with the Standard & Poor's 500 Index adding 0.3 percent. The University of Michigan's preliminary index of sentiment climbed to 88.7 this month from 81.6 in November. Economists expected a reading of 85, according to a Bloomberg survey. The two-month increase in consumer confidence was the largest in more than two years.

A drop in crude prices in New York may help ease concerns that higher fuel costs will curb consumer spending in the U.S., the world's biggest buyer of oil. Crude prices dropped 2.1 percent to $59.39 a barrel on signs supplies will be adequate to meet demand over the next several months.

TSE Glitch

The Tokyo bourse yesterday said it was due to the exchange's trading system that Mizuho Securities Co.'s couldn't retrieve the trading error in J-Com Co. shares immediately. The error at Mizuho Securities on Dec. 8 sparked losses for financial shares, helping send key indexes to their biggest drop in two months.

Mizuho Financial said the error at its brokerage arm cost the bank at least 27 billion yen ($223 million). J-Com shares were suspended from trading all day on Dec. 9, and will be again today, according to the exchange.

On Nov. 1, the Tokyo bourse suspended all equities trading for the first time after its computer system failed following an upgrade to handle record levels of share transactions.

Shares of non-ferrous metal companies such as Mitsubishi Materials Corp. may also advance on expectation higher gold prices will help boost their earnings. Gold may rise for a sixth straight week, matching this year's longest rally, because investors are adding bullion to their portfolios as an alternative to underperforming stocks and bonds, a Bloomberg survey shows.

Fourteen of twenty-six traders, investors and analysts surveyed from Mumbai to Chicago on Dec. 8 and Dec. 9 advised buying gold, which gained 4.6 percent last week and reached a 24-year high of $534.30 an ounce in New York. Seven respondents recommended selling and five were neutral.



To contact the reporter for this story:
Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net.
Last Updated: December 11, 2005 17:56 EST