By Akiko Ikeda Dec. 17 (Bloomberg) -- Japanese stocks rose for a second day as oil and metal prices jumped and the U.S. Federal Reserve kept interest rates low. Inpex Corp., Japan’s largest energy exploration company, advanced 2.7 percent after crude oil climbed the most in a month. Toyota Motor Corp., the world’s largest carmaker that gets 31 percent of revenue in North America, added 0.5 percent after data from the U.S. government showed housing and consumer prices increased. Toray Industries Inc. leapt 3.3 percent as the synthetic-fiber maker had its rating lifted at UBS AG. “Investors are becoming more tolerant of risk,” said Takeshi Osawa, a　senior fund manager in Tokyo at Norinchukin Zenkyoren Asset　Management Co. “Commodities and stocks related to emerging nations should rise as the fear of risky assets eases.” The Nikkei 225 Stock Average rose 0.4 percent to 10,221.46 at the 11 a.m. trading break in Tokyo. The broader Topix index gained 0.2 percent to 900.43. Both indexes are set for the highest close since Oct. 26. The Topix has risen 4.5 percent this year to yesterday, the smallest return among the world’s 30 largest stock markets. The Standard & Poor’s 500 Index has gained 23 percent in 2009, while the European Dow Jones Stoxx 600 Index has climbed 26 percent. Stocks in the Japanese benchmark are valued at 38 times estimated earnings, compared with 18 times for the S&P and 16 times for the Stoxx. Commodities Climb Metal and oil producers led shares higher. Inpex added 2.7 percent to 677,000 yen. Pacific Metals Co., a nickel miner, surged 7.5 percent to 628 yen, the steepest increase in the Nikkei. Sumitomo Metal Mining Co., Japan’s largest gold producer, gained 2.1 percent to 1,412 yen. Mitsui & Co., whose profit is the most sensitive among Japan’s five largest trading houses to changes in the price of oil, leapt 1.6 percent to 1,281 yen. The London Metals Index, a measure of six metals including copper and zinc, climbed 2.3 percent yesterday. Crude oil for January delivery jumped 2.8 percent to $72.66 a barrel in New York, rising the most in a month. Gold climbed for a second day, extending its biggest gain in two weeks by 0.1 percent to 1,137.30. In New York, the Standard & Poor’s 500 Index added 0.1 percent to 1,109.18 after the Fed repeated its pledge to keep interest rates “exceptionally low” for an “extended period.” Policy makers reiterated that low interest rates are contingent on “low rates of resource utilization, subdued inflation trends, and stable inflation expectations.” U.S. Builders Builders broke ground on 574,000 homes in November, an 8.9 percent annualized increase from the prior month, the Commerce Department said in Washington. “The U.S. data showed business sentiment is improving,” said Mitsushige Akino, who oversees the equivalent of $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “There will be a tug of war between improvement in business confidence and contraction of excess liquidity.” The yen fell for a third day against the dollar after the yield differential between 10-year U.S. and Japanese debt expanded to the widest in four months. “A rise in U.S. yields due to a healthy economic recovery is positive for Japanese stocks,” said Hiroaki Hiwada, a strategist at Tokyo-based Toyo Securities Co. “If the interest spread widens, the dollar will strengthen against the yen.” The yen depreciated to 90.00, compared with 89.51 at the close of stock trading in Tokyo yesterday, the weakest since Dec. 7. The weaker yen boosts the value of sales generated overseas in local terms for Japanese companies. Japan Drilling Toyota added 0.5 percent to 3,780 yen. Advantest Corp., the world’s biggest maker of memory-chip testers that gets about 45 percent of its revenue outside Japan, rose 2.3 percent to 2,200 yen. Toshiba Corp., an electronics maker which earns more than half of its revenue abroad, rallied 0.6 percent to 502 yen. Toray Industries added 3.3 percent to 509 yen, set for the highest close since Nov. 6. UBS AG analyst Takaaki Muramatsu raised the synthetic-fiber maker to “neutral” from “sell.” Japan Drilling Co. traded at 5,380, up 42 percent from its initial offering price of 3,800 yen, on its first day of trading in Tokyo, as the nation’s only offshore oil and gas drilling contractor seeks to expand its rig lineup. Daito Trust Construction Co. gained 1.6 percent to 4,490 yen, headed for the highest close since Aug. 24. The builder was lifted to “buy” from “hold” by Takeshi Fujita, an analyst at Deutsche Bank AG. To contact the reporter for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net.

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