BoJ Notes Economic Recovery; Banks Up

Darlington Musarurwa
15 Apr, 2010
New York City

Stocks in Tokyo closed higher after the Bank of Japan noted in the regional survey that economic activities are picking across all regions but at different pace. Japan lowered industrial production downwards. Banks closed higher in trading ahead of earnings.

[R]5:00 AM New York, 7:00 PM Tokyo – Stocks in Tokyo closed higher after the Bank of Japan noted in the regional survey that economic activities are picking across all regions but at different pace. Japan lowered industrial production downwards. Banks closed higher in trading ahead of earnings.[/R]

Japan’s market averages increased after the Bank of Japan noted that the country’s economy is picking up in all regions.

Chinese economy expanded at 11.9% in the March quarter, registering double-digit growth for the second straight quarter.

In Tokyo trading Nikkei 225 Stock Average rose 0.6% or 68.89 to 11,273.79, and the broader Topix Index advanced 0.8% to 998.90.

In the first section of the Tokyo Stock Exchange 490 million shares worth 4.9 billion yen were traded and in the second section 11.3 million shares valued at 692 billion yen changed hands.

Of the Nikkei 225 index stocks, 155 rose, 57 fell and 13 were unchanged. Shinsei Bank led gainers in the index shares with a rise of 8.9% followed by Kobe Steel jumping 6.7%.

Industrial Production Revised Downwards

Japan’s Ministry of Economy, Trade and Industry reported today that industrial production fell 0.6% to 93.7 in February after a preliminary report showed it was flat.

Shipments tumbled 0.2% to 94.8 after previously being recorded as flat, but inventory rose 1.6% to 95.5.

The inventory ratio gained 0.3% to 108.3.

BoJ Notes Rebound in Economic Activities

Bank of Japan reported in its regional economic report that all nine regions in Japan maintained a similar view that their respective economies had picked up.

However, the pace and extent of the recovery still differ.

Two regions of Shikoku and Kyushu-Okinawa maintained their assessments, while the other seven regions-Hokkaido, Tohoku, Hokuriku, Kanto-Koshinetsu, Tokai, Kinki, and Chugoku- noted an upward change in the economic trend compared with the January assessment.

According to the report, private consumption as a whole remained weak in the six regions of Tohoku, Hokuriku, Kanto-Koshinetsu, Kinki, Shikoku, and Kyushu-Okinawa.

All regions reported a continued increase in sales of household electrical appliances and passenger cars, but Shikoku and Kyushu-Okinawa reported that the pace of increase in sales of passenger cars had eased.

The six regions of Hokuriku, Kanto-Koshinetsu, Kinki, Chugoku, Shikoku, and Kyushu-Okinawa the decline in business fixed investment was coming to a halt.

Hokkaido reported that it had started to increase, Tohoku said business fixed investment had continued to decline substantially, while Tokai reported that it had remained at a low level.

Hokuriku and Chugoku announced that the increase in production was becoming widespread in sub-industries.

However, Tohoku and Shikoku indicated that the pace of increase in production had slowed at some firms with high production levels.

The BOJ said the employment situation has remained severe in all regions, but four regions- Tohoku, Kanto-Koshinetsu, Tokai, and Chugoku- reported signs of either an improvement or leveling out.

Household income was on a declining trend in most regions.

Nikkei Movers

J Front Retailing Co Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 2.8% followed by losses in Meiji Holdings Co., Ltd of 1.6%, in All Nippon Airways Co., Ltd of 1.3%, in Sanyo Electric Co., Ltd 1.3% and in Sumitomo Chemical Company Ltd 1.2%.

Shinsei Bank, Limited led gainers in the Nikkei 225 Stock Average with a rise of 8.8% followed by gains in Kobe Steel, Ltd 6.7%, in Hino Motors Ltd of 5.1% and in Mitsui O.S.K. Lines, Ltd 5.1%.

Other Movers

Komatsu Ltd the maker of industrial equipment gained 1.7% to 1,943.00 yen.

Mitsui O.S.K. Lines, Ltd the operator of merchant fleet advanced 5.1% to 699.00 yen.

Mitsubishi UFJ Financial Group, Inc rose 1.5% to 517.00 yen.

Mitsubishi Motors Corp fell 0.7% to 132.00 yen and the auto maker expects to begin production of the 1.3L gasoline-powered small car in September 2011 and launch sales in March 2012.

Seven & I Holdings Co., Ltd gained 3.1% to 2,462.00 yen after the operator of 7- Eleven stores said U.S. retail sales climbed.

Shinsei Bank, Limited increased 8.8% to 135.00 yen after the lender plans to raise capital by several tens of billions of yen by selling new securities to its existing shareholders, the Yomiuri newspaper reported.

Sumitomo Mitsui Financial Group, Inc the bank added 1.6% to 3,330.00 yen.