Japan’s Nikkei 225 Stock Average rose for a second day on speculation a so-called “bad bank” rescue plan in the U.S. will ease global financial turmoil. Mitsubishi UFJ Financial Group Inc., Japan’s largest listed bank, added 1.2 percent after people familiar with the matter said the Federal Deposit Insurance Corp. may be tasked with buying toxic assets on bank balance sheets. Nippon Electric Glass Co. soared 9 percent while Tokyo Electric Power Co. sank 3.3 percent as investors moved to cyclical shares from defensive ones on speculation stimulus plans will revive growth. Nomura Holdings Inc. sank 2.2 percent after reporting a record quarterly loss. “The bad bank plan has been regarded as a last resort to global credit turmoil,” said Mitsushige Akino, who oversees the equivalent of $615 million at Tokyo-based Ichiyoshi Investment Management Co. “It could possibly unlock credit markets and help solve the global financial crisis all at once.” The Nikkei 225 Stock Average climbed 45.22, or 0.6 percent, to close at 8,106.29 in Tokyo, erasing an earlier loss of as much as 1.5 percent. The broader Topix index slipped 1.16, or 0.1 percent, to 804.33, with almost the same number of stocks rising and falling. The Nikkei sank by a record 42 percent last year as writedowns and credit losses surpassed $1 trillion at global financial companies, and the benchmark has lost another 8.5 percent in 2009. Still, the gauge’s members trade at 20.6 times their estimated net income for the next fiscal year, higher than 12.3 times on the Standard & Poor’s 500 Index and 9.0 times at Europe’s Dow Jones Stoxx 600 Index. FDIC Control The FDIC may manage the so-called bad bank that would buy the troubled assets, two people familiar with the matter said. U.S. President Barack Obama’s team may announce the outlines of its financial-rescue plan as early as next week, an official said, while the Senate added another $70 billion in tax relief to an economic stimulus proposal already worth $825 billion. Mitsubishi UFJ added 1.2 percent to 503 yen, and closest competitor Mizuho Financial Group Inc., the Japanese lender with the biggest losses related to the U.S. mortgage crisis last year, jumped 1.3 percent to 233 yen. Sumitomo Mitsui Financial Group Inc., Japan’s No. 3 publicly traded bank, gained 1.2 percent to 3,360 yen. The stocks were most actively traded by value in Tokyo. Nippon Electric Glass Co., the world’s third-biggest maker of glass for flat-panel televisions, soared 9 percent to 567 yen. Asahi Glass Co. jumped 6.1 percent to 504 yen. A gauge of glassmakers was the biggest winner among 33 industry groups on the Topix. Nippon Electric lost 75 percent last year as prices for 32- inch TV panels fell by half, according to Taipei-based researcher WitsView Technology Corp. After the close, the company reported a 15 percent jump in nine-month net income. Defensive Selloff “There are expectations in the market the economy will start recovering later this year after businesses reduce their inventories to match current demand,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co., which oversees about $6.1 billion. “Those who support this view are switching to cyclical stocks from defensive ones, and today’s gain in glassmakers is part of this shift.” Tokyo Electric, Asia’s biggest utility, retreated 3.3 percent to 2,785 yen, and Kansai Electric Power Co. dropped 3.3 percent to 2,355 yen. Power generators, considered to be “defensive” shares as their earnings are relatively shielded from an economic slowdown, were the biggest drag on the Topix, followed by telecommunications companies and train operators. A rebound in oil prices also weighed on utilities. Crude oil for March delivery rose as much as 2 percent today, after having lost 11 percent in the past two sessions. A $1 change in a barrel of crude alters Tokyo Electric’s annual fuel costs by 18 billion yen, the company said in October. Dividend Canceled Nomura dropped 2.2 percent to 625 yen, breaking a two-day winning streak. The brokerage reported a record 342.9 billion yen ($3.8 billion) loss in the third quarter and said it wouldn’t pay its fourth-quarter dividend. The results prompted Standard & Poor’s to cut Nomura’s credit rating by one level to BBB+. Obic Co. rallied 7.2 percent to 14,400 yen after the computer-system service provider said nine-month operating profit advanced 7 percent, and the shares were lifted to “buy” by Nomura Securities Co. So-net M3 Inc. soared 15 percent to 315,000 yen on an 11 percent jump in the medical information company’s nine-month net income. Yokogawa Electric Corp., the world’s biggest maker of electronic measuring tools, plunged 9.7 percent to 439 yen, leading decliners on the Nikkei. The company reversed its full- year forecast to a net loss of 40 billion yen as the stronger- than-expected yen eroded overseas sales and foreign-exchange losses increased. Nikkei futures expiring in March gained 0.4 percent to 8,110 in Osaka and rose 0.7 percent to 8,115 in Singapore.

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