Japan stocks rose, headed for a third weekly gain, as the government’s pledge for subsidies lifted solar power-related manufacturers, while companies including Nitto Boseki Co. announced share buybacks. Ulvac Inc., a maker of solar-cell production equipment, gained 8.4 percent, adding to yesterday’s 19 percent climb after the government said on Dec. 24 it will provide funds to homeowners who install solar panels. Textile maker Nitto Boseki soared 14 percent, even after it reversed its forecast to a loss, on its plan to buy back 17 percent of its shares. JFE Holdings Inc., Japan’s No. 2 steelmaker, sank 6.1 percent after saying it will cut output as demand from automakers dries up. The Nikkei 225 Stock Average added 107.65, or 1.3 percent, to 8,707.15 as of 12:39 p.m. in Tokyo. The broader Topix index rose 5.77, or 0.7 percent, to 841.79. The Nikkei climbed for a third-straight week, the longest stretch since May, with a 1.4 percent gain, while the Topix increased 0.9 percent. “The year ahead provides some hopes that markets can continue to rise,” said Naoteru Teraoka, who helps oversee $21 billion at Chuo Mitsui Asset Management Co. “A lot of bad news has been worked into share prices, while there’s a strong feeling that government policies will provide some support.” The collapse of the American housing market and ensuing financial crisis pushed Japan, the U.S. and Europe into simultaneous recessions. Japan’s trade ministry said today the nation’s slowdown deepened in November as companies cut production at the fastest pace in 55 years and rising unemployment prompted households to pare spending. Solar Subsidies The global economic slump has driven the Nikkei down 44 percent since the beginning of this year, the worst on record. Share declines have boosted possible returns to equity holders, as the dividend yield for Nikkei-listed companies is 2.49, more than twice the return on 10-year Japanese government bonds. Ulvac rose 8.4 percent to 1,338 yen, poised for the highest close since Nov. 14. Kaneka Corp., a synthetic resin maker that yesterday said it will boost its solar-cell capacity by at least 10 billion yen ($111 million), gained 9.2 percent to 582 yen. Asahi Glass Co., Asia’s largest glassmaker, added 3.2 percent to 481 yen after the Nikkan Kogyo newspaper said the company will spend 5 billion yen on production of solar-cell materials. The Ministry of Economy, Trade and Industry said on Dec. 24 it will encourage households to install solar panels with a 9 billion yen fund. About 35,000 households are expected to receive subsidies, the ministry said in a statement on its Web site. Buybacks, Dividends Nitto Boseki surged 14 percent to 145 yen, leading gains on the Nikkei. Dowa Holdings Inc., a metal refiner and recycler, rose 3 percent to 309 yen, while cemetery developer Nichiryoku Co. added 5.3 percent to 180 yen after saying they will buy back their shares. Takeda Pharmaceutical Co., Japan’s largest drugmaker, added 0.4 percent to 4,570 yen on its plan to retire 3.13 percent of outstanding shares. Rival Daiichi Sankyo Co. climbed 1 percent to 2,100 yen after the Nikkei newspaper cited company President Takashi Shoda as saying the drugmaker will raise its dividend this fiscal year even if it suffers a net loss. JFE declined 6.1 percent to 2,325 yen, while larger rival Nippon Steel Corp. slumped 1.7 percent to 287 yen. A gauge of steelmakers posted the sharpest decline among 33 industry groups on the Topix. JFE, whose shares have lost 59 percent this year, plans to deepen production cuts as demand from automakers and construction companies evaporates. Japan’s crude-steel output will probably drop a record 32 percent in January to March compared with a year earlier, the government said yesterday. “The cuts were greater than we had expected and leave something of a negative impression,” Toshiyuki Johno, an analyst at Nikko Citigroup Ltd. in Tokyo, wrote in a report on JFE. “We believe the downswing in real demand is also ongoing.” Asahi Breweries Ltd., Japan’s top-selling beermaker, climbed 1.7 percent to 1,542 yen after the Nikkei newspaper reported it will likely report a pretax profit of 98 billion yen this year, compared with the company’s current forecast of 95 billion.

Source