Japanese stocks soared on speculation demand in China will boost earnings at commodities companies and on optimism Japan’s government will enact more aggressive stimulus measures to avert a deepening recession. Mitsui & Co., which gets more than half its profit from commodities, jumped 11 percent after China said it will meet its growth target and oil rose. Komatsu Ltd., a which counts China as its fastest-growing market, rose 5.9 percent. Department store operator Uny Co. added 4.7 percent after Japan’s finance minister proposed a new stimulus plan. Sumitomo Mitsui Financial Group Inc. climbed 7.6 percent on a U.S. Treasury plan to set up a fund that will buy loans and securities from the market. The Nikkei 225 Stock Average rose 240.34, or 3 percent, to 8,186.30 as of 12:58 p.m. in Tokyo, the highest since Jan. 29. The broader Topix index added 22.99, or 3 percent, to 787.76, headed for a sixth-day gain, the longest stretch since a seven- day rally ended Jan. 7. “Given the magnitude of its economic package and the fact that infrastructure investment has a big impact on the country’s economy, China is very likely to be among the first nations to emerge from the slump,” said Naoki Fujiwara, chief fund manager at Tokyo-based Shinkin Asset Management Co., which oversees about $6.1 billion. “Underneath the current rally are expectations company earnings will start recovering in the second half of fiscal 2009.” China Growth Last week, the Nikkei gained 5 percent, bringing its two- week advance to 11 percent. The gauge’s constituents are estimated to pay dividends equivalent to 2.4 percent of their share prices, according to Nikkei Inc., or almost twice the returns on 10-year government bonds. Japan’s market was closed on March 20 for a national holiday. Japanese Finance Minister Kaoru Yosano yesterday said a new stimulus package would require trillions of yen and that a figure of 20 trillion yen ($209 billion) is “not out of line.” Japan’s economy contracted at annualized 12.1 percent pace in the three months to Dec. 31, the most since 1974. China’s 4 trillion-yuan ($585 billion) spending plan may add as much as 1.9 percentage points to its economic expansion, helping to achieve the government’s 8 percent growth target for this year, the State Council’s research group said yesterday. China may be the first country in the world to step out of the economic crisis, said Zhang Yutai, director of the Development Research Center of the State Council. Mitsui, Inpex Mitsui, Japan’s second-biggest trading house by value, soared 11 percent to 987 yen. The company was upgraded to “outperform” by Macquarie Group Ltd., which cited its strong balance sheet and the outlook for energy prices. Bigger rival Mitsubishi Corp. leapt 7.7 percent to 1,323 yen. Inpex Corp., the nation’s largest oil and gas explorer, climbed 5.1 percent to 719,000 yen, and closest rival Japan Petroleum Exploration Co. added 5.2 percent to 4,040 yen. Crude for May delivery added as much as 1.6 percent to $52.90 a barrel today in after-hours electronic trading on the New York Mercantile Exchange, bringing a three-day advance to 8.2 percent. Komatsu, the world’s second-biggest maker of earthmoving equipment, advanced 5.9 percent to 1,183 yen, while closest domestic rival Hitachi Construction Machinery Co. jumped 4.8 percent to 1,363 yen. Sumitomo Mitsui, Japan’s No. 3 listed bank, gained 7.6 percent to 3,810 yen, while market leader Mitsubishi UFJ Financial Group Inc. rose 7 percent to 523 yen. Mizuho Financial Group Inc., the No. 2, added 5.7 percent to 221 yen. The banks were the most actively traded stocks in Tokyo. The U.S. will introduce a program that buys real estate loans from banks and securities from the market, Treasury Secretary Timothy Geithner wrote in a Wall Street Journal article dated today. The fund will provide as much as $1 trillion to finance purchases, he wrote. Margin Shorts Orix Corp., Japan’s No. 1 non-bank financial company, soared 13 percent to 3,380 yen, making it the second-biggest winner on the MSCI World Index. Margin-short positions on the stock tumbled by almost half last week, according to data compiled by Japan Securities Finance Co. In a short sale, an investor borrows stock and sells it in the hope it can be bought back later at a cheaper price. Orix soared 44 percent last week. Uny jumped 4.7 percent to 733 yen, while Seven & I Holdings Co., Japan’s biggest retailer, climbed 3.2 percent to 2,015 yen. Aeon Co., the nation’s No. 1 super market operator, advanced 2.3 percent to 636 yen, extending its gain to a sixth day. “Yosano’s remarks raised expectations in the market that the government will introduce more measures to revive Japan’s economy and bolster the stock market,” Tomochika Kitaoka, a strategist at Tokyo-based Mizuho Securities Co., said in an interview with Bloomberg Television. Nikkei futures expiring in March added 3.4 percent to 8,130 in Osaka and gained 3.5 percent to 8,135 in Singapore.

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