By Masaki Kondo Nov. 28 (Bloomberg) -- Japan’s stocks headed toward the best week in a month on expectations governments will take more steps to pull the global economy out of recession. Electronics shares fell after Panasonic Corp. cut its profit forecast by 90 percent. Mitsui & Co., Japan’s No. 2 trading company, surged a second day, bringing its weekly gain to 13 percent, on speculation commodities prices will pick up after China cut benchmark interest rates. Kawasaki Kisen Kaisha Ltd. jumped 5.2 percent on expectations shipping demand will rebound. Kyocera Corp. soared 16 percent after saying it would buy back shares. Panasonic tumbled 11 percent as slumping global demand and falling prices prompted the electronics maker to slash its earnings target. “Investors have shifted their focus from the current economic slump to authorities’ stimulus measures,” Yoshinori Nagano, a senior strategist at Daiwa Asset Management Co., said in an interview with Bloomberg Television. His company manages the equivalent of $96 billion in Tokyo. The Nikkei 225 Stock Average added 38.29, or 0.5 percent, to 8,411.68 as of 12:45 p.m. in Tokyo. The broader Topix index rose 0.19, or less than 0.1 percent, to 829.22. The Nikkei headed for a 6.3 percent gain this holiday-shortened week, while the Topix was set to rise 3.3 percent, the best weekly climb for both gauges since the period ending Oct. 31. U.S. markets were closed yesterday for the Thanksgiving holiday. The Nikkei was set to lose 1.9 percent in November for a sixth-straight monthly drop, the longest losing streak on record for the gauge going back to 1970. Fed Meeting Credit losses and writedowns at financial companies have neared $1 trillion worldwide, spurring central banks and governments to cut rates and spend more to stimulate economies. The People’s Bank of China on Nov. 26 reduced its benchmark lending rate by the most in 11 years, while the European Union proposed a 200 billion euro ($258 billion) spending package, joining Japan, China and the U.S. in crafting stimulus plans. The Federal Reserve meets Dec. 16 and may cut key lending rates to 0.75 percent from 1 percent, based on the median of 69 estimates in a Bloomberg survey. It pledged $800 billion this week to help ease the credit crisis. Mitsui, which gets more than half its earnings from commodities, climbed 8.8 percent to 850 yen, the steepest jump since Nov. 5, while larger rival Mitsubishi Corp. added 6.1 percent to 1,183 yen. Kawasaki Kisen, the nation’s third-largest shipping line, rose 5.2 percent to 384 yen, and Mitsui O.S.K. Lines Ltd., the second biggest, advanced 4.6 percent to 500 yen. Trading houses and shipping companies were the biggest winners among 33 industry groups on the Topix. Kyocera, an electronics component maker, soared 16 percent to 5,910 yen, posting the steepest climb on the MSCI World Index. The company yesterday said it will buy back up to 4.2 percent of its outstanding shares. Speaker and microphone maker Foster Electric Co. rose 16 percent, the most since May 2002, to 726 yen, after announcing its own buyback. Panasonic Earnings Panasonic sank 11 percent to 1,146 yen, while closest rival Sony Corp. dropped 2.6 percent to 1,828 yen. Panasonic said business conditions were “deteriorating sharply” when it reduced its targets for sales, operating profit and net income yesterday. Nomura Securities Co. cut its ratings on Panasonic and Sony to “neutral” from “buy.” “There is doubt on whether businesses can achieve their profit forecasts, even those they’ve already lowered,” said Hiroshi Sato, chief investment officer of GCSAM Co., a Tokyo- based fund manager. “Investors are too scared to buy in.” The value of stocks traded on the Tokyo bourse’s main board tumbled for a third day yesterday to the lowest level for a full- day session since July 27, 2005. Nikkei futures expiring in December added 0.6 percent to 8,420 in Osaka and gained 0.6 percent to 8,415 in Singapore. ----With reporting by Motoko Kakizaki in Tokyo. Editor: Rocky Swift To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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