By Patrick Rial Dec. 11 (Bloomberg) -- Japan’s Topix index climbed for a fourth day, led by Honda Motor Co., after the House of Representatives passed a bailout for the U.S. car industry. Honda, which gets half its sales in North America, extended this week’s gains to 31 percent　on speculation a U.S. auto bailout will alleviate a recession in the world’s biggest economy. Sumitomo Mitsui Financial Group Inc. jumped 5.8 percent on reports the bank will raise more capital than originally forecast as bank lending in Japan surged. Kao Corp., which uses petrochemicals in its beauty products, sank 3.3 percent as oil prices climbed ahead of expected production cuts from OPEC. The Topix index rose 6.88, or 0.8 percent, to 841.43 as of the 1:07 p.m. on the Tokyo Stock Exchange, set for its longest winning streak since June. The Nikkei 225 Stock Average lost 21.70, or 0.3 percent, to 8,638.54. “We are now witnessing a market that wants to rise,” said Kiyoshi Ishigane, a Tokyo-based senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. “There remains some concern about the passage of a bailout, but the good news is the frame of Republicans’ debate has gradually changed from outright resistance to opposition to certain details.” Honda soared 7.4 percent to 2,185 yen. Larger rival Toyota Motor Corp. reversed an early drop on speculation it will cut production and won’t be able to pay its planned dividend, rising 2.1 percent to 2,990 yen. Mazda Motor Co., which exports about 80 percent of its production, added 3.2 percent to 162 yen. Toyota Dividend The House approved a $14 billion loan package intended to prevent a collapse of domestic automakers that would threaten millions of U.S. jobs. The vote sends the measure to the Senate, where opposition is growing. “The direction of the auto bailout has become harder to read,” Juichi Wako, a Tokyo-based strategist at Nomura Securities Co., said in an interview with Bloomberg Television. “This problem will continue to determine the bearing of the stock market.” Toyota shares earlier dropped as much as 2.2 percent as the carmaker may cut auto production by 1 million units, Japan’s national broadcaster NHK said. It may also have to cut its dividend, as repeating last year’s payout would require more than four times its forecast for second-half profit, based on Bloomberg calculations. Lending Rebound Sumitomo Mitsui rose 5.8 percent to 330,000 yen. The lender will raise 700 billion yen in new capital through preferred share sales, up from a previous plan to boost capital by 400 billion yen, a person familiar with the situation said. The Nikkei newspaper said the funds are being raised to meet increasing loan demand from companies locked out of credit markets. Market leader Mitsubishi UFJ Financial Group Inc. added 5.8 percent to 495 yen. Lending by Japanese banks rose 3.6 percent in November from a year earlier, the Bank of Japan said last week. That was the fastest pace of growth since records began in 1992. Orix Corp., Japan’s largest non-bank financial company, soared by its daily limit for a second day, rising 500 yen, or 11 percent, to 5,230 yen. Orix received 100 billion yen in new bank loans and 20 billion yen in asset financing on Dec. 9. Concerns about the company’s ability to roll over debt sent the shares down 78 percent this year prior to the announcement. “Non-bank shares have been falling for the longest time and kept dropping even when the Nikkei 225 bottomed out in October,” said Mitsubishi UFJ’s Ishigane. “The shares were due for a rebound.” Commodities Climb Kao, Japan’s largest maker of household and personal care products, declined 3.5 percent to 2,615 yen. Bridgestone Corp., the world’s largest tiremaker by sales, dipped 1.1 percent to 1,520 yen. Mitsubishi Corp., Japan’s largest trading company, and which generates more than half of its profit from commodities dealing, rose 9.1 percent to 1,255 yen. Energy Minister Sergei Shmatko said Russia will announce proposals for reducing production by Dec. 17, when the Organization of Petroleum Exporting Countries meets, Interfax said. The group, source of more than 40 percent of the world’s oil, may trim output by as much as 2.5 million barrels a day next week, billionaire hedge-fund manager Boone Pickens said Dec. 9. Crude oil, which has fallen more than $100 from its record in July, gained 3.4 percent to $43.52 a barrel in New York yesterday. The contract rose as much as 1.7 percent today. Copper futures rallied 3.6 percent, while gold gained 4.5 percent. Mitsui Chemicals Inc. lost 5 percent to 341 yen. The company is among chemical producers halting production at some domestic plants on falling demand, the Nikkei newspaper reported. “In one way or another, efforts to boost the price of oil are going to work - OPEC’s production cuts as well as the general market turnaround will help prices rebound,” said Mitsubishi UFJ’s Ishigane. To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.

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