5:00AM New York, 7:00PM Tokyo – Expectations of easing credit market worries lifts Tokyo stocks.

Stocks in Japan traded in positive territory buoyed by comments from the chief executive of Lehman Brothers Dick Fuld that helped eased worries over credit market losses and positive earnings outlook from Intel Corp.

Market sentiment

In Tokyo trading Nikkei 225 rose 1.2% or 155.55 to 13,146.13, and the broader Topix Index gained 1.4% or 17.59 to 1,273.56.

In the first section of the Tokyo Stock Exchange 8.4 billion shares worth 958 billion yen were changed and in the second section 351 million shares valued at 7.6 billion yen changed hands.

Of the Nikkei 225 stocks 168 gained, 50 declined, and 7 were unchanged. Sumco Corp led advancers in the Nikkei 225 index shares with a rise of 8.53% followed by Mitsui Engineering & Shipbuilding climbing 7.51% on an optimistic outlook over the future health of the world economy.

Temasek injects $600 million in Merrill Lynch

The Financial Times reported yesterday that Singapore state investment company Temasek Holdings has invested an additional $600 million in Merrill Lynch in February despite incurring a paper loss on its existing $4.4 billion investment late last year.

The report noted the company made the additional investment shortly before Merrill closed its financial books for the year ending March 31.

Temasek had the option to buy the additional 12.5 million shares by the end of March under its initial agreement in December to take a 9.46% stake in Merrill Lynch and paid $48 for each additional Merrill share.

Separately, the Wall Street Journal reported that Merrill Lynch will report a write down of between $6 billion and $8 billion when it announces earnings tomorrow compared with independent projections of $5 billion that were made earlier.

Japanese utilities engage Xstrata for lower contract prices

Bloomberg news, quoting the Tex Report, said Japanese power utilities are continuing negotiations with Xstrata Plc with the aim of seeking a lower annual contract coal price than the $125 a metric ton that was agreed between the Swiss company and Chubu Electric Power Co.

Most electricity generators in western Japan have fixed contract rates for Australian thermal coal at $125 a ton for the year that started April, sharply higher than $55.65 a year ago.

Gainers & Losers

Sumco Corp. led advancers in the Nikkei 225 index shares with a rise of 8.53% followed by increases in Mitsui Engineering & Shipbuilding of 7.51%, in Kajima Corp. of 7.19%, in Obayashi Corp. of 7.02%, and Sumitomo Realty of 6.65%.

Sumco Corp gained after Intel Corp forecasted quarterly revenues will be between $9 billion and $9.6 billion beating the estimates of $9.25 billion.

Kajima Corp. advanced after net income in the year to March jumped to 42 billion yen against analyst forecasts for an increase in profit to 37.1 billion yen.

Financial stocks also gained after Lehman Brother chief executive Dick Fuld said at the investment bank’s annual meeting that credit markets will take ""a number of quarters to regain its previous strength,” but for now “the worst is behind us”. Last week Goldman Sachs chief executive Lloyd Blankfein and Morgan Stanley CEO John Mack echoed the same sentiment.

Mitsubishi UFJ Financial Group rose 4.04%, Mizuho Financial Group jumped 4.23% and Sumitomo Trust & Banking increased 4.42%.