Japan's Stocks Rise, Led by Toyota on Yields, Yen; Resona Gains

By Patrick Rial


Nov. 19 (Bloomberg) -- Japanese shares rose on speculation stocks are cheap compared with the return on bonds and after the yen weakened against the dollar, boosting the value of overseas sales. Toyota Motor Corp. led gains.

The Topix index fell to 1,471.67 at the end of last week, its second-lowest close of the year, boosting the average dividend yield on shares to 1.48 percent, higher than the 1.46 percent offered by 10-year government bonds.

``Around these levels is where the mid- and long-term investors such as pension funds start to jump in,'' said Norihiro Fujito, a senior strategist at Mitsubishi UFJ Securities Co. in Tokyo. ``From a valuation perspective shares are attractive with the dividend yield above bonds.''

Resona Holdings Inc. led gains by lenders after the nation's fourth-largest bank lifted its full-year profit forecast by 9.5 percent and didn't announce a writedown on subprime loan investments, boosting confidence losses on such securities in Japan may be limited.

Mitsui & Co. advanced after the Organization of Petroleum Exporting Countries made no mention of increasing production of crude oil, leaving room for the price of the commodity to climb.

The Nikkei 225 Stock Average added 113.12, or 0.8 percent, to 15,267.73 as of 9:14 a.m. in Tokyo. The broader Topix index gained 11.23, or 0.8 percent, to 1,482.90.

Nikkei futures expiring in December added 0.5 percent to 15,260 in Osaka and climbed 0.4 percent 15,265 in Singapore.

In other Asian markets open for trading, Australia's S&P/ASX 200 Index jumped 1.2 percent and South Korea's Kospi index rose 0.2 percent.