6:00AM New York, 7:00PM Tokyo- Abu Dhabi investment in Citigroup leads Tokyo rebound. Corporate Service Price Index firms 1.4% in October.

Japan’s stock index rebounded from a 2.2% slump in the morning session on news that Abu Dhabi Investment Authority plans to buy a $7.5 billion stake in troubled bank Citigroup Incorporated.

In Tokyo trading Nikkei 225 rose 0.58% or 87.64 to 15,222.85, while the broader Topix Index gained 11.75 to 1,478.78.

In the first section of the Tokyo Stock Exchange 8.7 billion shares worth 1.0 trillion yen traded and 364.3 million shares valued at 6.5 billion yen changed hands.

Of the Nikkei 225 stocks 144 gained, 72 declined, and 9 were unchanged.

Sanyo Electric Co led the gainers with a rise of 8.47% after the company reported first half net income increase to 16 billion yen from a 6.2 billion yen loss in the previous year.

Exporters also gained as yen declined against the dollar. Canon firmed 0.54%, Toyota Motor Corporation gained 1.84% and Sony Corporation spiked 4.55%.

Citigroup agreed to sell $7.5 billion of equity to Abu Dhabi Investment Authority, adding that the units will convert into common shares. Abu Dhabi also agreed not to own more than 4.9% equity and will not have rights to nominate a board member and nominate management of the company. The equity unit will earn 11% interest rate and will have a conversion feature to purchase equity in the bank between $31.83 and $37.24 a share. The high rate of rate that the bank is willing to pay shows the plight of Citigroup and its need of capital.

Separately, Goldman, Sachs analyst said that HSBC might have to add $12 billion more in bad debts at its sub-prime lender Household International Incorporated.

Bank of Japan reported in its monthly Corporate Service Price Index today that the index edged higher to 1.4% in October from 1.3% in September. The domestic Corporate Goods Price Index also gained 2.4% in October for the year compared to 1.7% in September.

Statistics for the indexes for major groups and subgroups showed that the finance and insurance industries index slipped 0.6% from 97.0 to 97.4 from a year ago and gained 0.4% in September from 0.1% in October. Retail estate services also rose 1.1% from 91.2 to 91.3 a year ago and slipped 0.1% in October compared to 0.3% in September.

Transportation services index gained 7.1% for the year and 2.1% for the month, while communications and broadcasting services were unchanged at 83.8 in October. Furthermore, advertising services slumped 1.3% in October from 8% in September and leasing and rental services gained 0.2% for the months from a 0.2% retreat in the previous month of September.

Separately, Bank of Japan Governor Toshihiko Fukui said today in a press conference in Tokyo the sub-prime woes would have a negative impact on banks, adding that the central bank needs to consider long-term risks in determining interest rate policy.

The Ministry of Economy Trade and Industry said today loans guaranteed for small and midsized companies in construction industry had been expanded by 400 million yen for secured loans and 160 million yen for unsecured loans. The temporary relief program will start today and will run until the end of March next year. Housing starts dropped 37.1% in the third quarter, while investment in housing dropped 7.8%.

Japan’s Economy and Fiscal Policy Minister Hiroko Ota said today that the country’s deflation pressures plaguing the economy are waning even though global competition is preventing companies from raising prices of both goods and services.

Finance Minister Fukushiro Nukaga also announced today at a press conference in Tokyo that tax revenue for the fiscal year ending March from the initial forecast of 53.5 trillion yen. The revenue target might be revised downwards for the first time in five years.

The yen however gained to 107.99 from 108.01 against the dollar at the close of trading.

Of the Nikkei 225 index shares, Sanyo Electric Company led the advancers with a rise of 8.47%, followed by increases of 6.86% in Nippon Suisan, in Kajima Corp of 6.80%, in Mitsubishi UFJ Nicos 6.45%, and in Shimizu Corp of 4.55%.

Sanyo Electric rose after the company’s first half net income rose to 16 billion yen from a 6.2 billion yen loss a year ago. The company left its full year net income forecast unchanged at 20 billion yen on projected sales of 2.23 trillion yen. However, operating profit is forecasted to rise to 50 billion yen from 45 billion yen at the end of the year.

Mitsui Chemicals led the decliners in the index with a fall of 4.58%, followed by declines of 4.19% in Sumco Corporation, 4.08% in Mitsui Engineering & Shipbuilding, 4.04 in Mitsubishi Materials, and 3.67% in Sumitomo Corp.