Japanese Stocks Climb on Indications U.S. Fed Will Lower Rates

Japanese stocks climbed after comments by Federal Reserve Vice Chairman Donald Kohn raised expectations the central bank will cut interest rates, easing concern growth will stall in Japan's biggest overseas market.

Nintendo Co. led gains by exporters after the yen weakened against the dollar, bolstering the value of companies' overseas sales. Mitsubishi UFJ Financial Group Inc., Japan's largest bank by market value, jumped on speculation increased liquidity will offset investment losses.

``Kohn's comments increased expectations of a rate cut, and we might even see a large reduction this time, which should help to support the U.S. economy and stocks at home as well,'' said Naoki Fujiwara, who helps oversee $3.2 billion as chief fund manager at Shinkin Asset Management Co. in Tokyo. ``The yen is a function of the economic outlook, which is why investors are buying dollars.''

The Nikkei 225 Stock Average gained 359.96, or 2.4 percent, to 15,513.74 at the close of trading in Tokyo. The Topix index rose 38.83, or 2.6 percent, to 1,514.47. Both benchmarks climbed the most since Nov. 14.

Nintendo, the world's biggest maker of handheld game players, rose 2,900 yen, or 4.7 percent, 65,100 in Osaka. Mitsubishi UFJ gained 62 yen, or 6.1 percent, to 1,076. Mizuho Financial Group Inc., Japan's second-largest bank by market value, climbed 26,000 yen, or 4.7 percent, to 583,000.

Nintendo also gained after the Kyoto-based company yesterday said U.S. consumers bought 350,000 Wii video-game consoles last week, the most since the first days of sales a year ago.

Deterioration `Not Anticipated'

Honda Motor Co., which generates 55 percent of its sales in North America, jumped 130 yen, or 3.6 percent, to 3,740. Toyota Motor Corp., the world's largest automaker by market value, rose 190 yen, or 3.2 percent, to 6,190, the biggest gain since Oct. 26.
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