Japanese stocks rise on industry output,weak Yen

March 30 (Bloomberg) -- Japanese stocks rose after the yen weakened against the dollar and the U.S. economy expanded at a faster-than-expected pace. Honda Motor Co. paced advances.
Stocks also advanced after a measure of industrial production fell less than expected, boosting confidence in the outlook for Japan's economy.
``With the weaker yen, it's reasonable to expect shares to gain,'' said Mitsushige Akino, who oversees $468 million in assets at Ichiyoshi Investment Management Co. in Tokyo. ``The February industrial production figure today is a big focus point for investors.''
The Nikkei 225 Stock Average climbed 55.04, or 0.3 percent, to 17,321.98 as of 9:55 a.m. in Tokyo. The broader Topix index added 8.21, or 0.5 percent, to 1718.89. In March, the Nikkei has dropped 1.5 percent, while the Topix has fallen 1.8. Both gauges are set to snap three months of advances. For the quarter the Nikkei has advanced 0.7 percent and the Topix has risen 2.4 percent.
Mitsubishi Estate Co. led gains by property developers after consumer prices excluding fresh food fell, indicating the Bank of Japan will not be able to lift interest rates soon.
Honda, Japan's No. 2 automaker, jumped 90 yen, or 2.2 percent to 4,160. Sony Corp., the second-largest consumer electronics maker globally, advanced 50 yen, or 0.8 percent, to 6,030. Kyocera Corp., the world's biggest maker of ceramic packaging for chips, climbed 70 yen, or 0.6 percent, to 11,150.
Weaker Yen
The yen fell 1 percent to 118.07 per dollar in New York yesterday, the biggest slide since Oct.7. The Japanese currency weakened 1.2 percent, the most since March 6, to 157.40 against the euro. The yen recently changed hands at 118.17 against the dollar and 157.41 versus the euro.
A weaker yen increases the value of Japanese exporters' dollar-denominated sales when converted back into local currency, while their products become more competitive abroad.
U.S. gross domestic product expanded at a 2.5 percent annualized rate last quarter, the Commerce Department said yesterday in its final reading of the figure. That was more than the median estimate of 2.2 percent growth by 75 economists in a Bloomberg survey.
Adding to investor confidence in the U.S. economy, jobless claims dropped more than forecast to 308,000, while core personal consumption, a price gauge, was revised lower to 1.8 percent from a previous reading of 1.9 percent.
In Japan, industrial production fell a seasonally adjusted 0.2 percent in February from the previous month, the trade ministry said today. Economists surveyed by Bloomberg had forecast a 0.7 percent drop. Inventories dropped 0.4 percent.
Economic Data
Domestic demand-related companies advanced following the report. Mizuho Financial Group Inc., the nation's No. 2 bank, climbed 12,000 yen, or 1.6 percent to 756,000. Nippon Telegraph & Telephone Corp., the country's largest telephone company, jumped 13,000 yen, or 2.1 percent, to 623,000.
Real estate companies advanced after consumer prices declined, suggesting the Bank of Japan will not be able to raise rates. Lower interest rates benefit property developers because they borrow to fund new building projects.
Mitsubishi Estate, the nation's No. 2 property developer, advanced 30 yen, or 0.8 percent, to 3,850. Sumitomo Realty & Development Co., the third largest, added 50 yen, or 1.1 percent, to 4,450.
Consumer prices excluding fresh food dropped 0.1 percent in February, the statistics bureau said 30 minutes before the start of trading in Tokyo. That was the first decline since April 2006 and in-line with the median estimate of economists surveyed by Bloomberg News. Japan's central bank has said it will closely monitor prices in determining interest rate policy.
Eight Days
Household spending rose a higher-than-estimated 1.3 percent, a second month of increases, the statistics bureau said, while the unemployment rate remained unchanged at 4 percent, in-line with economist estimates.
Oil-related companies advanced after the price of crude climbed for an eighth day. Inpex Holdings Inc., Japan's biggest oil explorer, jumped 22,000 yen, or 2.2 percent, to 1.02 million. Japan Petroleum Exploration Co., the second largest, climbed 140 yen, or 1.7 percent, to 8,640.
Crude oil for May delivery surged 3 percent to $66.03 a barrel in New York, the highest since Sept. 8. Futures rose for eight straight trading days for the first time since June.
Rakuten Inc., Japan's biggest online retailer, gained 1,000 yen, or 1.8 percent, to 57,000. The company is considering acquiring more shares in Tokyo Broadcasting System Inc., the Asahi newspaper reported.
Sumitomo Corp. rose 130 yen, or 1.5 percent, to 8,630. Japan's third-largest trading company will pay 30 billion yen ($254 million) for a 5 percent stake in Westinghouse Electric Co., the nuclear-plant builder owned by Toshiba Corp., Nikkei English News said.
Nikkei futures expiring in June rose 0.7 percent to 17,370 in Osaka in advanced 0.5 percent to 17,375 in Singapore.