GET IN ON THE JAPANESE RECOVERY

Japan Stocks May Rise on Yen; Fuji TV May Gain on DoCoMo Tie-Up

Dec. 21 (Bloomberg) -- Japanese stocks may rise for a third day after a rally in the dollar against the yen bolstered the value of sales for exporters including Toyota Motor Corp. and Canon Inc. in the U.S., the world's largest economy.

``A stronger dollar gives investors the confidence to bet on stocks,'' said Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc. in Tokyo. ``I'm expecting a broad rally as investors anticipate more gains in stocks next year.''

Nishi expects the Nikkei 225 Stock Average to climb as high as 15,800 today.

Fuji Television Network Inc. may gain, leading shares of communications companies higher. NTT DoCoMo Inc., Japan's biggest mobile-phone operator, may buy a 3 percent stake in the broadcaster this month, the Nihon Keizai newspaper reported.

Yesterday, the Nikkei 225 rallied 1.6 percent to 15,641.26 in Tokyo. The Topix index also advanced 1.6 percent to 1613.99. Nikkei 225 futures expiring in March traded in Chicago at 15,645, up from their closes of 15,580 in Osaka and 15,585 in Singapore.

The Nikkei has surged 36 percent so far this year, five times last year's advance. The Topix has jumped 40 percent, headed for its third straight year of gains.

Exporters may lead the Nikkei and Topix higher after the dollar's gain boosted the value of their dollar-denominated sales. The U.S. currency rose more than 1 yen to 117.25 yen in New York from 116.14. The dollar recently traded at 117.08 yen.

Dollar Boost

Toyota had 60 percent of its sales outside Japan last fiscal year. The company's annual operating profit increases by about 25 billion yen for every 1-yen drop against the dollar, according to an estimate by Merrill Lynch & Co.

Canon, the world's largest seller of digital cameras, generated about 75 percent of its sales from overseas last year.

Fuji TV, Japan's biggest broadcaster, may gain. DoCoMo is seeking to buy a stake in Fuji TV as part of a move toward digital broadcasting on mobile telephones, the Nihon Keizai newspaper reported. DoCoMo has already held talks with other media companies including TV Asahi Corp., the report said.

Automakers may also gain on expectations their fuel- efficient models will lure more customers away from General Motors Corp. and other U.S. makers, helping them take a greater share of the world's biggest auto market.

Yesterday, Toyota and Honda Motor Co., the world's two largest carmakers by market value, forecast record U.S. sales next year, causing GM shares to fall to a 23-year low in New York.

Elsewhere, Sega Sammy Holdings Inc. may gain. The company may report a pretax profit of 115 billion yen for the year ending March, 10 percent higher from a year ago, the Nihon Keizai reported, without saying where it obtained the information.

That would exceed the company's forecast by 15 billion yen as the company benefits from increasing sales of slot machines and pachinko pinball machines.



To contact the reporter for this story:
Michael Tsang in Tokyo at mtsang1@bloomberg.net;
Makiko Suzuki in Tokyo at msuzuki13@bloomberg.net.
Last Updated: December 20, 2005 18:15 EST