By Masaki Kondo Nov. 25 (Bloomberg) -- Japan stocks climbed amid speculation the U.S. economy and demand for commodities will recover on the government rescue of Citigroup Inc. and lawmakers’ pledge to deliver a new stimulus plan. Inpex Corp., Japan’s largest oil explorer, climbed 5.8 percent after crude jumped the most in three weeks yesterday. Canon Inc., which gets a third of its sales from the Americas, added 6.1 percent after U.S. lawmakers said they would pass another spending plan to jumpstart the world’s biggest economy. Mitsui Fudosan Co. and Mitsubishi Estate Co., Japan’s biggest developers, surged after UBS AG recommended the stocks. “The U.S. government has made it clear it won’t allow Citigroup to fail, so investors believe the financial crisis won’t deepen,” said Naoki Fujiwara, who oversees about $720 million at Shinkin Asset Management Co. “It’s unlikely commodity prices will just continue falling because demand is still there in the global market. People have been too pessimistic.” The Nikkei 225 Stock Average rose 244.16, or 3.1 percent, to 8,154.95 as of 12:41 p.m. in Tokyo, headed for the steepest jump since Nov. 10. The broader Topix index gained 13.57, or 1.7 percent, to 816.26, with almost two stocks rising for each that slumped. Japan’s markets were closed yesterday for a holiday. Three-quarters of stocks on the Topix have fallen to below their book value as almost $1 trillion in credit losses and writedowns battered financial firms and dragged the global economy into recession. U.S. congress will send President-elect Barack Obama an economic stimulus package worth between $500 billion and $700 billion as soon as he takes office, Senator Charles Schumer said on Nov. 23 on ABC’s “This Week” program. Oil, Copper Crude oil for January delivery climbed 9.2 percent to $54.50 a barrel in New York yesterday, the biggest one-day jump since Nov. 4 as the Citigroup rescue plan bolstered confidence banks will loosen lending and demand for raw materials will increase. Copper futures for March delivery rose 5.9 percent. Oil futures retreated today. Inpex soared 5.8 percent to 512,000 yen, while Sumitomo Metal Mining Co., Japan’s second-largest copper smelter, rose 6.3 percent to 745 yen. Nippon Mining Holdings Inc., the nation’s largest producer of the metal, gained 5.8 percent to 256 yen. Canon, the world’s biggest camera maker, added 6.1 percent to 2,860 yen. Honda Motor Co., a carmaker that gets more than half its profit from North America, rose 3.9 percent to 2,025 yen. Fuji Heavy Industries Ltd., the maker of Subaru cars, surged 9 percent to 315 yen after Merrill Lynch & Co. raised it to “buy,” saying the company may beat its profit forecast. Citigroup Rescue Mizuho Financial Group Inc., Japan’s second-biggest listed bank, rose 8.4 percent to 246,000 yen, making it the most actively traded stock by value in Tokyo. Closest rival Sumitomo Mitsui Financial Group, Inc. added 6.9 percent to 326,000 yen, and Daiwa Securities Group Inc., the nation’s second-largest brokerage, climbed 4.9 percent to 450 yen. Citigroup received a government support package which injects $20 billion of capital and shields the bank from losses on $306 billion of troubled mortgages. The bank’s stock soared 58 percent yesterday, rebounding from last week’s 60 percent plunge. Mitsui Fudosan jumped 7.6 percent to 1,282 yen, sending a gauge of real-estate companies to the biggest gain among 33 industry groups on the Topix. Mitsubishi Estate, Japan’s second- biggest developer, climbed 8.3 percent to 1,260 yen, while Sumitomo Realty & Development Co., the No. 3, added 12 percent to 1,291 yen. UBS raised the three companies to “buy” from “neutral,” saying the stocks are discounted for an “overly pessimistic scenario.” The Nikkei and Topix didn’t match a gain in the Standard & Poor’s 500 Index, which surged 6.5 percent yesterday and capped its biggest two-day rally since 1987. The Citigroup rescue can’t stem concern company earnings will falter in step with the world’s economy, Shinkin’s Fujiwara said. “That Citi has been saved doesn’t mean the economy will recover,” he said. “They are completely different issues.” Nikkei futures expiring in December added 2.9 percent to 8,180 in Osaka and gained 6.2 percent to 8,175 in Singapore. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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