By Akiko Ikeda Dec. 3 (Bloomberg) -- Japanese stocks rose, sending the Topix index toward its biggest weekly advance in 17 years, on speculation export earnings will gain as the yen weakened to the lowest in at least five days against the dollar and the euro. Sony Corp., an electronics maker that gets almost one- fourth of sales in the U.S., climbed 5.4 percent. Toyota Motor Corp. and Honda Motor Co., which both make at least 60 percent of their sales abroad, gained more than 4 percent. Automakers also climbed after the Nikkei English News reported PSA Peugeot Citroen may buy a stake in Mitsubishi Motors Corp. The company surged 18 percent, the most on the Nikkei 225 Stock Average. Sharp Corp. Japan’s biggest maker of liquid-crystal displays, advanced 3 percent as the stock was lifted to “neutral” from “sell” at UBS AG. “The current level of the yen is creating a sense of security among investors,” said Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc., which manages about 800 billion yen ($8.6 billion). “It’s a good opportunity for foreign companies to buy Japanese shares.” The Nikkei 225 Stock Average advanced for a fourth day, rising 2.7 percent to 9,866.91 as of 1:04 p.m. in Tokyo, a level not seen since Nov. 11. The broader Topix climbed 2.6 percent to 880.78 and was set for an 8.6 percent weekly gain, set for the steepest climb since 1992. All but one of the gauge’s 33 industry groups climbed. Sony Rallies The yen fell against all 16 of its major counterparts and traded as low as 87.92 against the dollar today, the weakest since Nov. 24. Against the euro, it retreated for a third day to 132.60 in Tokyo from 131.46 yesterday in New York. A weaker yen boosts the value of overseas earnings at Japanese companies when converted into their home currency. The Topix trades at 1.1 times book value compared with 2.2 for the Standard & Poor’s 500 Index and 1.7 for the Dow Jones Stoxx Index. “The yen, within the scope of Japanese companies’ assumptions, should support shares,” said Mitsushige Akino, who oversees the equivalent of $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. The yen climbed to a 14-year high against the dollar last week and has averaged 93.89 this year, the strongest since currencies began trading freely in 1971. That has weighed on the Topix, making its 2.4 percent gain in 2009 the lowest return among the world’s 40 largest stock markets. Sony rallied 5.4 percent to 2,460 yen, rising the most since July 31. Canon Inc., the world’s largest camera maker which gets about 80 percent of its revenue from abroad, advanced 3.6 percent to 3,470 yen. Carmakers Jump Toyota, which makes about 60 percent of its sales overseas added 4.2 percent to 3,710 yen, headed for the highest close since Sept. 25. The stock was the most actively traded by value today. Honda, which gets 86 percent of its revenue from abroad, gained 4 percent to 2,980 yen, set for the highest close in three months. A measure of carmakers jumped 4.6 percent, the second- steepest gain among the Topix industry groups, after Nikkei said Paris-based PSA Peugeot Citroen is in talks with Mitsubishi Motors to buy a 30 percent to 50 percent stake. Mitsubishi Motors soared 18 percent to 141 yen, rising the most since October 2008. Mitsubishi Heavy Industries Ltd. added 4 percent to 310 yen, as the heavy machinery maker holds a 15 percent stake in the automaker. Bank of Japan Governor Masaaki Shirakawa said yesterday that Prime Minister Yukio Hatoyama didn’t call for further monetary policy easing when they met in Tokyo, a day after the central bank announced a 10 trillion-yen ($110 billion) credit program amid government calls for it to combat falling prices. Tokyo Electron, Sharp Tokyo Electron Ltd., the world’s second-largest maker of chip-manufacturing equipment, jumped 5.7 percent to 5,340 yen and was the biggest contributor to the Nikkei’s gain. The company expects orders this quarter to exceed the company’s forecast, helped by demand from memory chipmakers, Chairman Tetsuro Higashi said. Sharp, which makes liquid-crystal displays, climbed 3 percent to 1,060 yen, a level not seen since Sept. 18 after UBS AG lifted the stock to “neutral” from “sell.” Japan Tobacco Inc. surged 6.8 percent to 274,800 yen, on course for the steepest advance since June 15. The Mainichi newspaper reported the Japanese government may increase tobacco taxes by as much as 3 yen a cigarette starting April next year, less than a 10 yen increase proposed by the Health Ministry. To contact the reporter for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net.

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