Nikkei Surges 3.2%

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
03 Jun, 2010
New York City

Stocks in Tokyo surged the most in the last six months after U.S. auto sales increased and positive economic data in Europe and the U.S.

[R]5:00 PM Tokyo, Japan – Stocks in Tokyo gained after U.S. reported rising auto sales in May and home sales index showed a recovery. The yen continue to trade weak on the political turmoil ahead of the election. Capital spending in Japan declined in the quarter ending in March. Japanese automakers report rising U.S. sales.[/R]

The Nikkei 225 Index in Tokyo closed higher 3.24% or 310.95 to 9,914.19 and of the stocks in Nikkei 225 Stock Average, 220 increased, 2 declined and 3 was unchanged.

Stocks in Tokyo surged the most in the last six months after U.S. auto sales increased and positive economic data in Europe and the U.S.

However the yen continued to decline on the political turmoil in Japan ahead of election.

Japanese businesses cut capital spending for the quarter, underscoring concern that businesses are protecting earnings by mainly cutting costs.

Capital spending excluding software fell by 12.9% in the three months to March as compared to the prior year period, after sliding to 18.5% in the previous quarter, a Finance Ministry report said in Tokyo today.

The government will use today’s report to revise GDP figures on June 10.

Japan’s GDP expanded an annualized 4.9% in the first quarter.

Japanese auto makers reported rising sales in May in the U.S. as consumer confidence recovers. Nissan Motor Co sales soared 24% from a year earlier and sales at Toyota Motor Corp gained 6.7% and at Honda Motor Co. increased 19%

Bank of Kyoto Ltd, which has a 4.5% stake in video-game maker Nintendo Co, said it will keep its stake in Japanese exporters to protect its commercial lending business.

“The strength of a bank’s relationship with a client is decided mainly by the stake it holds. The custom to share out loans to banks based on stake holding is still very strong in Japan,” said the bank’s President Yasuo Kashihara in an interview yesterday.

Nikkei Movers

Alps Electric Co Ltd led gainers in the Nikkei 225 Stock Average with a rise of 9.1% followed by Isuzu Motors Ltd 9.0%, Taiyo Yuden Co., Ltd 8.9% and Credit Saison Co., Ltd 7.3%.

Tokyo Gas Co Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 0.7% followed by Sumitomo Osaka Cement Co., Ltd 0.5%, Konami Corp 0.06%, MS&AD Insurance Group Holdings, Inc 0.09% and NTT DoCoMo, Inc 0.29%.

Other Movers

Honda Motor Co., Ltd advanced 4.2% to 2,829.00 yen after the company reported a 19.1% jump in May U.S. sales from a year ago to 117,173 cars and trucks.

Itochu Corporation rose 4.1% to 749.00 yen after GE will form an alliance with Itochu Corporation to strengthen their wind and other renewable energy businesses.

Kawasaki Kisen Kaisha, Ltd gained 5.7% to 371.00 yen after a broker lifted its rating on the stock.

Nissan Motor Co., Ltd climbed 4.8% to 673.00 yen after the company reported May sales in the U.S. soared 24.1% from a year ago.

Takefuji Corp, the consumer lender, surged 11.8% to 302.00 yen.

Toyota Motor Corporation added 3.5% to 3,350.00 yen after it reported 6.7% increase in auto sales in the U.S.