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Japanese shares rose after lower Italian and Spanish borrowing costs signaled that European policy makers are getting a handle on the debt crisis.
The Nikkei rose 1.4% to 8,500.02 on Fraiday, climbing 1.3% on the week.
Canon Inc., a camera maker that gets a third of its revenue in Europe, rose 3.1% after the yen fell against the euro yesterday.
Inpex Corp. climbed 1.2% after Japan’s biggest energy explorer said it would proceed with a $34 billion liquefied natural gas project in Australia.
Pacific Metals added 4.5%, while Bridgestone Corp. gained 1.4%. Iron and steel companies had the second-largest advance in the Topix’s 33 industry groups.
Goldman Sachs said Pacific Metals and Bridgestone are among the Japanese stocks that will advance the most this year as the market recovers from its worst slide since 2008.
European stocks rose as declining borrowing costs at sales of Italian and Spanish debt outweighed worse-than-forecast data on U.S. jobs and retail sales.
Spain auctioned 10 billion euros ($12.7 billion) of bonds maturing in 2015 and 2016 yesterday, twice the maximum target set for the sale. The yield on the three-year notes was 3.384 percent, compared with 5.187 percent when the nation sold similar securities in December.
Italy issued 12 billion euros of Treasury bills, meeting its target as its borrowing costs plunged. The Rome-based Treasury auctioned 8.5 billion euros one-year bills at a rate of 2.735 percent, down from 5.952 percent at the last auction.
Royal Bank of Scotland Group Plc climbed the most in two years, leading gains in financial shares. UniCredit SpA, Italy’s biggest bank, advanced 11%. ING Groep NV, the largest Dutch financial-services company, rallied 11%.
Commerzbank surged 16%. Germany’s second-largest lender plans to raise capital to levels required by the European Banking Authority without asking taxpayers for aid, said two people with knowledge of the matter.
U.S. stocks retreated as euro- region governments braced for credit downgrades by S&P and after JPMorgan Chase & Co.’s profit slumped.
After the market close, S&P said France lost its AAA rating. All 10 groups in the S&P 500 fell as financial and industrial gauges slid at least 0.7%.
JPMorgan, the largest U.S. bank by assets, dropped 2.5%. Bank of America Corp. (BAC), Intel Corp. (INTC) and Alcoa Inc. (AA) lost more than 1.3%.
Germany, Belgium, Estonia, Finland, Ireland, Luxembourg and the Netherlands had their ratings affirmed by S&P as France lost its AAA rating. France was cut to AA+ and the rating has a negative outlook, S&P said in a statement. Cyprus, Italy, Portugal and Spain were cut by two notches S&P said. The long- term ratings on Austria, Malta, Slovakia and Slovenia were cut one notch.
Concern about potential downgrades overshadowed data showing that confidence among U.S. consumers rose more than forecast in January to the highest level in eight months, a sign household spending may hold up early this year. Separate figures showed that the U.S. trade deficit widened more than forecast in November as American exports declined and companies stepped up imports of crude oil and automobiles.
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