Nikkei Gains; Political Turmoil Persists

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

Stocks in Japan gained after European Central Bank raised it growth forecast for Europe and said it will continue to buy bonds. The rally was led by electronics makers.

[R]5:00 PM Tokyo, Japan – Japanese Indexes gained on higher estimate of growth in Europe. Japan’s Financial Services Minister resigns after two days in post. Japan and Jordan will hold talks for a nuclear treaty. Clarion Co Ltd led gainers in the Nikkei 225 Stock Average with a surge of 10.4%.[/R]

Stocks in Japan gained after European Central Bank raised it growth forecast for Europe and said it will continue to buy bonds. The rally was led by electronics makers.

The Nikkei 225 Stock Average gained 1.7% to close at 9,705.25 at close and of the stocks in the index, 188 increased, 28 declined and 9 remained unchanged.

The broader Topix gained 1.1% to close at 866.44 with four times shares gaining as declining.

Shizuka Kamei resigned as Financial Services Minister after Prime Minister Naoto Kan declined to extend the parliamentary session to pass changes to banking and postal laws.

Even as Kamei resigned within three days of accepting the post, Kan called for urgent intra-party discussions to address and tackle the nation’s dependency on public borrowing to avoid a Greece like situation. Kan was making his first address to the parliament when he made these comments.

Osaka Gas Co, Japan’s second-biggest natural gas supplier, plans to accelerate overseas investments after energy conservation steps were slowing growth of demand in Japan.

“The current global economic slump makes it a buyer’s market and we intend to make about 10 acquisitions valued at 120 billion yen in Europe, North America and Australia. Wind farms and local gas distribution companies abroad are also investment vehicles we are looking at closely,” said Kazuo Kakehashi, the company’s head of energy resources and international business, in Tokyo yesterday.

Osaka Gas has already spent 110 billion yen to date buying stakes in power plants in the U.S., Spain and Australia, with assets totaling generating capacity of 1,180 megawatts.

Japan and Jordan will hold talks on June 13 in Amman, Jordan for a nuclear treaty, Japan’s Ministry of Foreign Affairs said in a statement today. The talks are expected to allow Japanese companies export nuclear technology to Jordan.

Jordan has short listed Atomic Energy of Canada’s Candu 6 reactor and the Areva-MHI Atmea reactor, Jordan Times reported on May 13, citing the Jordan Atomic Energy Commission.

Paris-based Atmea, a joint venture between Mitsubishi Heavy Industries and Areva SA, is negotiating to build a nuclear plant in Jordan, slated for completion in 2019. A successful nuclear treaty will pave the way for Atmea to clinch the deal.

Nikkei Movers

Clarion Co Ltd led gainers in the Nikkei 225 Stock Average with a rise of 10.4% followed by Fanuc Ltd 6.2%, Sumitomo Osaka Cement Co., Ltd 7.3% and Panasonic Corporation 6.9% and Dowa Holdings Co Ltd 5.7%.

Sekisui House, Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 4.2% followed by JX Holdings Inc 2.8%, Oki Electric Industry Company, Limited 2.4%, Kodi Corp 1.9% and The Chiba Bank, Ltd 1.8%.

Other Movers

Canon Inc added 1.9% to 3,715.00 yen.

Fanuc Ltd, the industrial-robot maker, advanced 1.4% to 10,380.00 yen.

Mitsubishi UFJ Financial Group, Inc added 3.1% to 429.00 yen after the bank plans to build up about 1 trillion yen of retained earnings over three years to meet globally strengthened capital adequacy requirements, according to the group''s midterm management plan.

Panasonic Corporation, the maker of plasma televisions, gained 6.9% to 1,220.00 yen.

Sony Corporation rose 1.8% to 2,571.00 yen, an electronics maker, said Sony Technology (Thailand) unit will invest $80 million to expand production capacity for digital cameras, lenses and parts. The news was first report by Reuters.