Japan's Stocks Climb

Japan's Nikkei 225 Stock Average rose to a seven-year high after a government report showed machinery orders climbed more than forecast in May. Komatsu Ltd. gained.

Energy-related shares including Nippon Mining Holdings Inc. and Marubeni Corp. also jumped after crude oil surged to the highest in 10 months last week and metals such as copper and gold rose.

``It looks like machinery orders for the past quarter will be better than people anticipated and that's contributing to positive sentiment in the market today,'' said Masaru Hamasaki, senior strategist at Toyota Asset Management Co., which oversees $3.3 billion in Tokyo. ``Rising commodity prices is a long-term trend that may last another two years.''

The Nikkei added 121.04, or 0.7 percent, to 18,261.98, the highest since May 2000. The broader Topix index rose 12.56, or 0.7 percent, to 1792.23.

Some exporters such as Nikon Corp. and Toyota Motor Corp. advanced on speculation the weakened yen will inflate the value of the companies' overseas sales and boost their profits.

Toshiba Corp. rose after the company said it's in talks to sell part of its stake in Westinghouse Electric Co. to a Kazakhstan state-run company.

Komatsu, the world's No. 2 maker of earthmoving equipment, jumped 70 yen, or 1.9 percent, to 3,800. Murata Manufacturing Co., which produces electric components, rose 120 yen, or 1.3 percent, to 9,050. Fanuc Ltd., the world's biggest factory robot maker, advanced 160 yen, or 1.3 percent, to 12,860.

Machinery Orders Jump

Machinery orders climbed a seasonally adjusted 5.9 percent from the previous month, the Cabinet Office said in Tokyo today, more than three times the 1.9 percent median estimate of economists surveyed by Bloomberg News.

Nippon Mining, Japan's biggest copper smelter which also makes profits by refining oil, climbed 45 yen, or 3.8 percent, to 1,232. Marubeni, a trading house which sells industrial fuel and metals, jumped 40 yen, or 3.8 percent, to 1,094. It was the most- actively traded stock by value with 66 billion yen ($534 million) in shares changing hands.

Crude oil for August delivery climbed 3 percent last week in New York to $72.81 a barrel, the highest close since Aug. 15. Gold futures for August delivery rose 0.6 percent and copper futures for September delivery rose to the highest close in almost two months on July 6.

Nikon, the world's No. 2 maker of machines that burn chip circuits onto silicon, jumped 130 yen, or 3.7 percent, to 3,680. Toyota, the world's biggest automaker by market value, added 50 yen, or 0.6 percent, to 7,830. Olympus Corp., the world's biggest endoscope manufacturer, advanced 60 yen, or 1.3 percent, to 4,800.

Weakened Yen

``A deep drop in the yen will attract investors to electronics companies and manufacturers of precision machinery and cars,'' said Norihiro Fujito, a senior strategist at Mitsubishi UFJ Securities Co. in Tokyo.

The yen recently traded at 168.35 per euro, the weakest since the 13-nation currency was adopted. It traded at 168.05 per euro late in New York July 6. The Japanese currency was at 123.64 per dollar from 123.34.

Toshiba, Japan's biggest maker of nuclear reactors by capacity, jumped 30 yen, or 2.9 percent, to 1,083. Keisuke Ohmori, a spokesman for Tokyo-based Toshiba, said on July 7 the company is in talks to sell part of its Westinghouse stake to Kazatomprom, a uranium importer and exporter.

Toshiba, which in October bought 77 percent of Westinghouse for $4.16 billion, may sell 10 percent to Kazatomprom in a bid to secure uranium reserves, Nikkei English News reported on July 6, without saying where it got the information. Kazakhstan, which has the world's second-largest uranium deposits, will pay more than 60 billion yen for the stake, Nikkei said.

Property Stocks Fall

Sawai Pharmaceutical Co., Japan's largest generic drugmaker by sales, and Towa Pharma Co., the nation's second biggest, jumped after the Nikkei newspaper reported Japan's largest companies including Mitsubishi Electric Corp. are encouraging employees to use low-cost generic drugs to cut health insurance costs.

Sawai climbed 140 yen, or 3.3 percent, to 4,430 and Towa advanced 130 yen, or 2.6 percent, to 5,170. The stocks were the best and the third-best performers among the 35 drugmaker shares included in the Topix.

Property developers declined on concern rising interest rates will erode corporate profits.

Mitsubishi Estate Co., Japan's second-biggest real estate company by sales, dropped 50 yen, or 1.5 percent, to 3,340. Mitsui Fudosan Co., the nation's biggest, slid 30 yen, or 0.9 percent, to 3,490. Higher interest rates increase the cost of mortgage loans.

Japan's 10-year bond yields rose to a three-week high in the five trading sessions to July 6. In the U.S., yields on the 10-year Treasury note also climbed 16 basis points to 5.19 percent last week, the biggest increase since March 31, 2006.

Nikkei futures expiring in September advanced 0.7 percent to 18,280 in Osaka and gained 0.6 percent to 18,275 in Singapore.

Fanuc Ltd. (6954 JT)
Komatsu Ltd. (6301 JT)
Marubeni Corp. (8002 JT)
Mitsubishi Estate Co. (8802 JT)
Mitsui Fudosan Co. (8801 JT)
Murata Manufacturing Co. (6981 JT)
Nikon Corp. (7731 JT)
Nippon Mining Holdings Inc. (5016 JT)
Olympus Corp. (7733 JT)
Sawai Pharmaceutical Co. (4555 JT)
Toshiba Corp. (6502 JT)
Towa Pharmaceutical Co. (4553 JT)
Toyota Motor Corp. (7203 JT)

source:bloomberg.com