Most Japanese Stocks Advance

Most Japanese stocks advanced after companies including Olympus Corp. and Mitsubishi Corp. reported first-quarter profit that attracted buyers.

Gains were limited after earnings at companies including Kyocera Corp. lagged behind investor expectations.

``The market is completely focused on earnings announcements,'' said Yoshihisa Okamoto, a fund manager at Mizuho Asset Management Co. with $26 billion in assets. ``Investors are getting away from companies with disappointing earnings and switching to those that exceeded expectations.''

Steelmakers slumped after Japan's Fair Trade Commission said it is investigating Nippon Steel Corp., JFE Holdings Inc. and Sumitomo Metal Industries Ltd. on suspicion of price fixing.

The Topix index added 0.47 point to 1706.18 at the close of trading in Tokyo. The Nikkei 225 Stock Average slipped 40.41, or 0.2 percent, to 17,248.89. Almost two stocks rose for each that declined on the first section of the Tokyo Stock Exchange.

The Nikkei tumbled 4.9 percent this month and the Topix slumped 3.9 percent, the worst performance for the indexes since May 2006.

Olympus soared 280 yen, or 6.1 percent, to 4,910. The world's biggest maker of endoscopes said profit rose to 17.6 billion yen ($148 million) from 7.12 billion a year earlier, buoyed by a weaker yen. The company also raised its net income forecast by 10 percent.

Mitsubishi Corp., Japan's largest trading company, surged 170 yen, or 5 percent, to 3,540. The company said it earned 68.32 yen per share in the first quarter, 29 percent of its full year forecast of 236.92 yen.

Unemployment Dips

Shinsei Bank Ltd. jumped 27 yen, or 6.4 percent, to 450. The first Japanese bank bought by overseas investors said first- quarter net income jumped 63 percent to 31.2 billion yen on increased lending and fees.

Aiding stock gains, the government said the unemployment rate unexpectedly fell to 3.7 percent last month from 3.8 percent in May. Economists had expected it to be unchanged.

Household spending climbed 0.1 percent last month, less than the 0.7 percent forecast. Monthly wages, including overtime pay and bonuses, unexpectedly dropped 1.1 percent from a year earlier.

Kyocera, a maker of mobile phones for KDDI Corp., plunged 770 yen, or 6.3 percent, to 11,500, its steepest drop since September 2003. The company said yesterday profit in its components business slumped 8.4 percent to 23.5 billion yen ($198 million) because of price declines and oversupply.

Mitsubishi Heavy Industries Ltd. slumped 36 yen, or 4.1 percent, to 843. Asia's biggest maker of power equipment said net income climbed to 17 billion yen in the latest quarter, from 9.27 billion yen a year earlier. The shares had climbed 62 percent this year to yesterday on expectations of rapid growth in nuclear power plant spending worldwide.

Price Fixing Probe

NTN Corp. declined 82 yen, or 7.7 percent, to 982. The world's fifth-largest maker of bearings said first-quarter net income dropped 12 percent to 7.3 billion yen, citing restructuring costs.

A gauge tracking steelmakers lost 1.9 percent, after rising as much as 1.1 percent. Spokespersons for Nippon Steel, JFE and Sumitomo Metal Industries Ltd. said the companies were raided by the fair trade commission in a price-fixing investigation.

Nippon Steel, Asia's largest maker of the alloy, declined 18 yen, or 2 percent, to 900. Nippon Steel was the most actively traded stock by value on the Tokyo bourse, with 91 billion yen worth of shares changing hands.

JFE, Japan's second largest, fell 140 yen, or 1.7 percent, to 8,210. Sumitomo Metal, the nation's No. 3, slid 19 yen, or 2.7 percent, to 692.

Nikon's Prospects

Nikon Corp., the world's second-biggest maker of single-lens reflex cameras, soared 200 yen, or 5.5 percent, to 3,820. Satomi Ushioda, an analyst at Nikko Citigroup, increased the target price for Nikon's stock by 31 percent to 4,400 yen. The company reported a 59 percent jump in net income after the close of trading.

``We expect Nikon to continue leading shipment growth of single-lens reflex cameras worldwide,'' Ushioda wrote in a report dated yesterday. The analyst also raised the estimate for Nikon's annual operating profit by 9.6 percent because of the weaker yen and ``better-than-expected shipments'' of SLR cameras and interchangeable lenses.

Nikkei futures expiring in September slipped 0.1 percent to 17,280 in Osaka and fell 0.1 percent to 17,270 in Singapore. The value of shares traded among companies included in the Topix was 3.09 trillion yen, exceeding the three-month average of 2.56 trillion.

JFE Holdings Inc. (5411 JT)
Kyocera Corp. (6971 JT)
Mitsubishi Corp. (8058v
Mitsubishi Heavy Industries Ltd. (7011 JT)
Nikon Corp. (7731 JT)
Nippon Steel Corp. (5401 JT)
NTN Corp. (6472 JT)
Olympus Corp. (7733 JT)
Shinsei Bank Ltd. (8303 JT)
Sumitomo Metal Industries Ltd. (5405 JT)

source:bloomberg.com