Japan Elects Naoto Kan as New Premier

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

Japan elected fifth prime minister in four years. The political turmoil gripped the administration of Prime Minister Yukio Hatomaya after he failed to deliver on several campaign promises and lost support of his party and coalition partners.

[R]5:00 PM Tokyo, Japan – Naoto Kan was elected as the next Prime Minister in Japan. Stocks in volatile trading closed marginally lower. Fuji Heavy Industries led gainers in the Nikkei 225 Stock Average with a gain of 7%.[/R]

Japan elected fifth prime minister in four years. The political turmoil gripped the administration of Prime Minister Yukio Hatomaya after he failed to deliver on several campaign promises and lost support of his party and coalition partners.

Finance Minister, Naoto Kan, was elected as head of Japan’s ruling party by a vote of 291 to 129 and later was elected by Japan’s lower house to be the nation’s next prime minister.

The Japanese indexes fluctuated but were on course for their first weekly increase in three weeks after Kan’s appointment eased concerns. The yen gained on the hopes that the new prime minister will encourage measures to boost liquidity in the financial system.

The Nikkei changed little after a volatile trading and the Topix Index closed nearly unchanged but gainers lead the losers.

The Nikkei 225 Stock Average Index in Tokyo closed lower 0.13% or 13.00 to 9,901.19 and of the stocks in Nikkei 225 Stock Average, 94 increased, 110 declined and 21 was unchanged.

Moody’s Investor Service, which has an Aa2 rating for Japan’s sovereign debt, will be hoping for a credible plan from the nation that will ensure market confidence on fiscal policy, said Thomas Byrne, a senior vice president of the firm in Singapore.

G-20 countries, which account for about 85% of global GDP, set a December deadline to formulate and agree on new rules on capital and liquidity requirements following the recent financial crisis.

U.S. Treasury Secretary Timothy Geithner told reporters in Washington on June 2 that the differences are narrowing on capital rules, although a final decision may not be possible in Busan talks. A ‘common, consistent, and cooperative’ approach would help strengthen the global economy, he said.

Nikkei Movers

Fuji Heavy Industries Ltd led gainers in the Nikkei 225 Stock Average with a rise of 6.9% followed by Shinsei Bank, Limited 4.2%, Fuji Electric Holdings Co., Ltd 3.9% and Sumco Corp 2.9%.

Sumitomo Osaka Cement Co., Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 3.7% followed by Taiheiyo Cement Corp 3.1%, Unitika Ltd 2.4%, Toppan Printing Co. Ltd 2.3% and Kuraray Co Ltd 2.2%.

Other Movers

Ain Pharmaciez Inc rose 4.9% to 3,605.00 yen.

Fuji Heavy Industries Ltd gained 6.9% to 566.00 yen after the automaker, which produces Subaru cars, may report a record operating profit of about 45 billion yen ($487 million) in North America, Nikkei English News reported.

Obayashi Corporation, the construction company, dropped 1.8% to 370.00 yen.

Sumitomo Osaka Cement Co., Ltd fell 3.7% to 179.00 yen.