Japan stocks lifted by investment deal

TOKYO - Japanese stocks rose Thursday as reports that a troubled U.S. bond insurer had closed an investment deal helped to ease concerns about the subprime loan crisis.

Traders largely ignored the U.S. Federal Reserve Bank's decision to cut two key interest rates, as the move had been widely anticipated and investors had already priced it into shares.

The benchmark Nikkei stock index rose 247.44 points, or 1.85 percent, to close at 13,592.47 on the Tokyo Stock Exchange. The index shed 0.99 percent the day before.

Tokyo shares fell in early trading, tracking overnight declines on Wall Street amid concerns that problems in the U.S. bond insurance sector could spill over into the Japanese economy.

But investor sentiment recovered midmorning on news reports that bond insurer MBIA Inc. and private equity firm Warburg Pincus had closed a previously announced investment deal. U.S. bond insurers have been under scrutiny amid concerns that securities backed by shaky mortgages would lead to a spike in insurance claims.

The Dow Jones industrial average, which gained as much as 100 points after the Fed announced its decision to cut its key rates by 50 basis points, ended Wednesday stock session down 0.3 percent. Anticipation of the Fed cut had pushed the Dow up more than 470 points this week before the downturn, and investors were ready to collect profit after the cut was announced.

Bargain-hunting in relatively undervalued blue chip stocks led Tokyo's gains, as did end-of-month buying by fund managers seeking to raise the value of their stock holdings.

"There was too much news from which investors could take cues today. While they were wondering what they should focus on, window-dressing buying brought the market up," said Masayoshi Okamoto, general manager at Jujiya Securities.

Toyota Motor Corp. jumped 5.4 percent to 5,820 yen, while Nissan Motor Co. rose 1.1 percent to 1,013 yen.

Matsushita Electric Co. surged 8.7 percent to 2,250 yen after the company said it had settled ongoing semiconductor patent lawsuits with Samsung Electronics Co. in the U.S. and Japan.

The broader Topix index, which includes all shares on the exchange's first section, added 26.20 points, or 1.98 percent, to 1,346.31.

In currencies, the U.S. dollar bought 106.46 yen at 2:50 p.m. Thursday, down from 106.95 yen late Wednesday in New York. The euro fell to $1.4879 from $1.4898.

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