Stocks Meander in Tokyo; JAL Restructuring

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
26 May, 2010
New York City

Stocks in Tokyo traded mixed and oil and copper closed higher. The Nikkei 225 Stock Average gained and the yen strengthened against the euro for the third straight day.

[R]5:00 PM Tokyo, Japan – Stocks in Tokyo trading closed mixed as commodities rise and worries of weak economic outlook dominate trading sentiment. Sanyo Electric received an order to build solar panels for a plant in Southern Italy.[/R]

Stocks in Tokyo traded mixed and oil and copper closed higher. The Nikkei 225 Stock Average gained and the yen strengthened against the euro for the third straight day.

The Nikkei 225 Index in Tokyo closed higher 62.77 or 0.66% to 9,522.66 and of the stocks in Nikkei 225 Stock Average, 124 increased, 81 declined and 20 was unchanged.

Bank of Japan’s efforts to halt deflation by cutting interest rates to near zero and lending 20 trillion yen to commercial banks have not had the desired effect. Members of Bank of Japan feel the central bank should not get too involved in allocation of capital to spur lending and boost economic growth.

‘The bank should devise ways to avoid involvement in resource allocation,’ members of the central bank said at the meeting held on April 30. Masaaki Shirakawa, the Governor of the BoJ in minutes of monetary policy meeting held on April 30 noted measures that border on fiscal policy can undermine the central bank’s credibility.

Sanyo Electric Co, the battery maker acquired by Panasonic Corp, has received an order to build solar-power generating plant with 32,202 panels in Puglia, southern Italy, from a group led by Deutsche Bank AG.

The plant will have a capacity of 7,567 megawatts and will be completed by September, said the Osaka-based company in a statement today. The company had said earlier this month that it is investing 50 billion yen in its solar cell operations in an effort to boost its operating margin to 4.5% from 2.3% in three years to March 2013.

Carlos Ghosn, CEO of Nissan Motor Co yesterday defended his estimated plan of selling 500,000 electric cars a year by 2012. He said that skepticism by detractors will not deter him as the number is only 0.8% or 0.9% of the total car market. He was speaking at an event at the Detroit Economic Club.

JAL Delays Submitting Rehabilitation Plan

Japan Today reported today that Japan Airlines Corp, operating under state-sponsored rehabilitation process, said it will submit its business turnaround plan to Tokyo District Court from June as initially planned to the end of August.

The report notes that the delay has been prompted by the need to review flight routes and come up with a plan that meets financial institution expectations.

Nikkei Movers

Fukuoka Financial Group, Inc led the decliners in the Nikkei 225 Stock Average with a loss of 6.0% followed by Sapporo Holdings Ltd 3.7%, Credit Saison Co., Ltd 3.5% and NGK Insulators Ltd 2.9%.

Mitsui O.S.K. Lines, Ltd led gainers in the Nikkei 225 Stock Average with a rise of 5.0% followed by Taisei Corp 4.7%, Softbank Corp 4.3% and Fast Retailing Co Ltd 4.3%.

Other Movers

Brother Industries Ltd added 5.1% to 976.00 yen after the maker of communications and office equipment rose most in four months on profit forecast.

Fukuoka Financial Group, Inc dropped 6.0% to 359.00 yen.

Mitsui O.S.K. Lines, Ltd gained 5.0% to 630.00 yen.

Nikon Corporation rose 2.3% to 1,702.00 yen.

Nissan Motor Co Ltd closed unchanged at 647.00 yen.

Sumitomo Mitsui Financial Group, Inc rose 1.5% to 2,685.00 yen.

Start Today Co, a Japanese Internet retailer of clothes has members whose average age is 28.8 years with 54% women customers. The company which runs the Zozotown website had transactions that totaled 37 billion yen in the latest fiscal year.

The company expects to triple the value of transactions and may reach 100 billion yen within the next couple of years’, said the company’s President Yusaku Maezawa in an interview in Tokyo last month.