Japanese stocks rose, extending the Nikkei 225 Stock Average’s second-straight weekly gain, as the weaker yen lifted the earnings prospects for makers of cars and electronics. Honda Motor Co., which gets more than half its sales from North America, jumped 4.4 percent after the yen fell to a one- month low. Olympus Corp., a camera maker that counts Europe as its biggest overseas market, soared 4.9 percent. Hokuetsu Paper Mills Ltd. soared 8.7 percent after UBS AG said it remains “bullish” on Japan’s paper industry. Toyota Motor Corp. narrowed its gain to 1.3 percent after losing its top credit rating from Moody’s Investors Service. “The yen’s depreciation is something investors are pleased with, because the stronger local currency is one of the main reasons Japanese companies have had to cut forecasts,” Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages about $53 billion, said in an interview with Bloomberg Television. The Nikkei 225 climbed 150.66, or 1.9 percent, to 8,100.31 as of 12:43 p.m. in Tokyo, while the broader Topix index rose 6.78, or 0.9 percent, to 793.19. The Nikkei was set for a 1.3 percent gain this week, while the Topix was poised for a 0.2 percent decline. More than half of Japanese companies that have reported third-quarter results also cut full-year profit forecasts, according to Tokyo-based Shinko Research Institute Co., in part because of the stronger yen. Canon Inc., which is expecting 160 billion yen ($1.8 billion) in operating profit this year, loses 9.1 billion yen for every 1 yen gain against the dollar. Dollar, Euro Honda, Japan’s second-biggest automaker, jumped 4.4 percent to 2,265 yen, while Mazda Motor Corp. added 2.8 percent to 145 yen. Canon, which earns a third of its sales from the Americas, rose 3.9 percent to 2,535 yen. Makers of cars and electronics contributed the most to the Topix’s advance. Toyota rose 1.3 percent to 3,080 yen, trimming an early 3.6 percent jump, after Moody’s cut its credit rating on the automaker to Aa1 from Aaa, citing deteriorating market conditions. The yen depreciated to as much as 92.25 against the dollar yesterday, the weakest since Jan. 8, from 89.28 at the close of stock trading in Tokyo, while falling versus the euro to much as 118.89 from 114.67. A weaker local currency boosts the value of overseas sales of Japanese companies. Today, the yen traded at 90.88 against the dollar and 116.18 versus the euro. Olympus, the world’s top endoscope maker, soared 4.9 percent to 1,510 yen. Konica Minolta Holdings Inc., a camera maker that gets 29 percent of its overseas sales in Europe, added 4.7 percent to 780 yen. Hokuetsu jumped 8.7 percent to 448 yen, leading a gauge of papermakers to the biggest advance among 33 industry groups on the Topix. Nippon Paper Group Inc., Japan’s second-biggest maker of the material, added 6.6 percent to 2,660 yen and larger rival Oji Paper Co. climbed 5.8 percent to 437 yen. ‘Structurally Profitable’ Makers of printing and writing paper “are structurally profitable even after cutting production by around 30 percent of capacity,” Takaaki Muramatsu, a Tokyo-based analyst for UBS, wrote in a note to clients dated yesterday. The companies “can record significant profit growth in fiscal 2009.” Mitsui Fudosan Co., Japan’s No. 1 developer, sank 2.2 percent to 1,268 yen, and closest competitor Mitsubishi Estate Co. fell 1.9 percent to 1,217 yen. Real estate shares were the biggest losers among Topix groups. Japan General Estate Co. yesterday filed for bankruptcy as a lack of collateral prevented the developer from securing funding. Its shares went untraded as orders to sell overwhelmed bids. Of six publicly traded companies that have filed for bankruptcy in Japan this year, three were in the real estate sector. The collapse of the U.S. mortgage market triggered more than $1 trillion of credit losses and writedowns at global financial companies and tipped the world’s biggest economies into recession. With banks tightening lending, bankruptcies among Japan’s listed companies reached an annual postwar record last year, according to Tokyo Shoko Research Ltd. Nikkei futures expiring in March added 2.1 percent to 8,100 in Osaka and Singapore.

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