Jan. 6 (Bloomberg) -- Japanese stocks rose, driving benchmark indexes to their highest levels since May, after faster-than-estimated growth in U.S. payrolls and service industries boosted optimism in the world’s largest economy. Canon Inc., a camera maker that gets about 80 percent of its sales abroad, increased 1.4 percent after the dollar surged against the yen, boosting the outlook for export earnings. Toyota Motor Corp., the world’s biggest carmaker, jumped 2.6 percent. Mitsubishi Corp., Japan’s largest commodities trader, gained 1.9 percent after oil and copper prices climbed. “There are mounting expectations about an economic recovery in the U.S.,” said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. “Investors have their eyes on the favorable factors. Excess liquidity is boosting demand for commodities.” The Nikkei 225 Stock Average rose 1.4 percent to 10,529.76 at the 3 p.m. close of trading in Tokyo, the biggest gain among benchmark equity gauges in the Asia-Pacific region. The broader Topix index climbed 1.4 percent to 924.51, with more than four times as many shares advancing as declining. Both measures reached their highest levels since May. Fast Retailing Co., Asia’s largest clothing retailer, tumbled 5.1 percent to 12,400 yen, the steepest decline in the Nikkei 225, after sales at its Uniqlo stores in Japan dropped in December for the fifth straight month. Resona Holdings Inc., a bank, surged 14 percent to 545 yen, the biggest gain in the Nikkei and the most-active stock by value in Japan. The Topix retreated 10 percent from its high last year on April 15 through to Dec. 30 as Europe’s debt crisis, China’s steps to curb property prices and concern about U.S. economic growth damped confidence in a global recovery. Strongest Annual Average Further weighing on Japanese stocks in 2010, the yen rose to its strongest annual average level against the dollar since currencies began trading freely in 1971, according to data compiled by Bloomberg and based on each day’s closing price. Stocks in the Topix were valued at 15.9 times estimated earnings on average, compared with 13.5 times for the Standard & Poor’s 500 Index and 11.1 times for the Stoxx Europe 600 Index. Makers of electronics and cars contributed the most to the gain in the Topix among its 33 industry groups. Canon, the world’s No. 1 camera maker, advanced 1.4 percent to 4,275 yen. Toyota Motor, an automaker that earns about 70 percent of its revenue abroad, climbed 2.6 percent to 3,380 yen. Mazda Motor Corp., Japan’s second-largest car exporter, gained 2.1 percent to 247 yen. Fanuc Corp., Japan’s largest maker of industrial robots, increased 2.7 percent to 12,970, the biggest single support for the Nikkei. ‘Recovery Track’ The S&P 500 climbed 0.5 percent in New York yesterday to its highest level since September 2008. The U.S. Institute for Supply Management said yesterday that its non-factory index, which covers about 90 percent of the economy, rose to 57.1 in December, exceeding the median forecast of economists surveyed by Bloomberg News and the fastest expansion since May 2006. ADP Employer Services said that U.S. companies added 297,000 jobs last month, almost triple the median economist estimate. “Investors are taking business confidence as being on a recovery track because economic measures are good in general,” said Mitsushige Akino, who oversees about $450 million in Tokyo at Ichiyoshi Investment Management Co. “A global pickup in business sentiment is boosting actual demand for commodities.” The dollar gained the most in three months against the yen yesterday in New York, and advanced to as much as 83.40 today in Tokyo, the highest level since Dec. 23. A stronger dollar boosts the value of U.S. income at Japanese companies when repatriated. Nikon, Mitsubishi Nikon Corp., a camera maker, jumped 3.5 percent to 1,818 yen. The company expects operating profit from its precision- equipment operations to reach about 28 billion yen ($340 million) in next fiscal year, seven times the amount forecast for this year, the Nikkei newspaper reported. Mitsubishi, which gets about 40 percent of its sales from metals and energy, increased 1.9 percent to 2,373 yen. Mitsui & Co., a trading company that counts commodities as its biggest source of profit, rose 2.7 percent to 1,427 yen. Crude oil for February delivery increased to $90.30 a barrel in New York yesterday. Copper futures for March delivery rose 0.9 percent to close at $4.408 a pound yesterday. --Editors: Nicolas Johnson, John McCluskey. To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net. To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net. Jan. 6 (Bloomberg) -- Japanese stocks rose, driving benchmark indexes to their highest levels since May, after faster-than-estimated growth in U.S. payrolls and service industries boosted optimism in the world’s largest economy. Canon Inc., a camera maker that gets about 80 percent of its sales abroad, increased 1.4 percent after the dollar surged against the yen, boosting the outlook for export earnings. Toyota Motor Corp., the world’s biggest carmaker, jumped 2.6 percent. Mitsubishi Corp., Japan’s largest commodities trader, gained 1.9 percent after oil and copper prices climbed. “There are mounting expectations about an economic recovery in the U.S.,” said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. “Investors have their eyes on the favorable factors. Excess liquidity is boosting demand for commodities.” The Nikkei 225 Stock Average rose 1.4 percent to 10,529.76 at the 3 p.m. close of trading in Tokyo, the biggest gain among benchmark equity gauges in the Asia-Pacific region. The broader Topix index climbed 1.4 percent to 924.51, with more than four times as many shares advancing as declining. Both measures reached their highest levels since May. Fast Retailing Co., Asia’s largest clothing retailer, tumbled 5.1 percent to 12,400 yen, the steepest decline in the Nikkei 225, after sales at its Uniqlo stores in Japan dropped in December for the fifth straight month. Resona Holdings Inc., a bank, surged 14 percent to 545 yen, the biggest gain in the Nikkei and the most-active stock by value in Japan. The Topix retreated 10 percent from its high last year on April 15 through to Dec. 30 as Europe’s debt crisis, China’s steps to curb property prices and concern about U.S. economic growth damped confidence in a global recovery. Strongest Annual Average Further weighing on Japanese stocks in 2010, the yen rose to its strongest annual average level against the dollar since currencies began trading freely in 1971, according to data compiled by Bloomberg and based on each day’s closing price. Stocks in the Topix were valued at 15.9 times estimated earnings on average, compared with 13.5 times for the Standard & Poor’s 500 Index and 11.1 times for the Stoxx Europe 600 Index. Makers of electronics and cars contributed the most to the gain in the Topix among its 33 industry groups. Canon, the world’s No. 1 camera maker, advanced 1.4 percent to 4,275 yen. Toyota Motor, an automaker that earns about 70 percent of its revenue abroad, climbed 2.6 percent to 3,380 yen. Mazda Motor Corp., Japan’s second-largest car exporter, gained 2.1 percent to 247 yen. Fanuc Corp., Japan’s largest maker of industrial robots, increased 2.7 percent to 12,970, the biggest single support for the Nikkei. ‘Recovery Track’ The S&P 500 climbed 0.5 percent in New York yesterday to its highest level since September 2008. The U.S. Institute for Supply Management said yesterday that its non-factory index, which covers about 90 percent of the economy, rose to 57.1 in December, exceeding the median forecast of economists surveyed by Bloomberg News and the fastest expansion since May 2006. ADP Employer Services said that U.S. companies added 297,000 jobs last month, almost triple the median economist estimate. “Investors are taking business confidence as being on a recovery track because economic measures are good in general,” said Mitsushige Akino, who oversees about $450 million in Tokyo at Ichiyoshi Investment Management Co. “A global pickup in business sentiment is boosting actual demand for commodities.” The dollar gained the most in three months against the yen yesterday in New York, and advanced to as much as 83.40 today in Tokyo, the highest level since Dec. 23. A stronger dollar boosts the value of U.S. income at Japanese companies when repatriated. Nikon, Mitsubishi Nikon Corp., a camera maker, jumped 3.5 percent to 1,818 yen. The company expects operating profit from its precision- equipment operations to reach about 28 billion yen ($340 million) in next fiscal year, seven times the amount forecast for this year, the Nikkei newspaper reported. Mitsubishi, which gets about 40 percent of its sales from metals and energy, increased 1.9 percent to 2,373 yen. Mitsui & Co., a trading company that counts commodities as its biggest source of profit, rose 2.7 percent to 1,427 yen. Crude oil for February delivery increased to $90.30 a barrel in New York yesterday. Copper futures for March delivery rose 0.9 percent to close at $4.408 a pound yesterday. --Editors: Nicolas Johnson, John McCluskey. To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net. To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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