Market Updates

Nikkei Climbs 1.8%; Business Sentiment Rises

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

    Stocks in Japan gained for the third day today after a government report showed an improved outlook in the country for capital spending and increased consumer confidence in the world

[R]5:00 PM Tokyo, Japan – Nikkei rises for the third consecutive day, on increased consumer confidence in the U.S. and rising business sentiment in Japan. Government releases a report that shows large business sentiment as rising in Japan. Honda resumes production at its parts plant in China.[/R]

Stocks in Japan gained for the third day today after a government report showed an improved outlook in the country for capital spending and increased consumer confidence in the world’s largest economy stoked consumer confidence.

The Nikkei 225 Stock Average climbed 1.8% or 174.60 to close at 9,879.85. The broader Topix rose 1.4% to close at 878.56. Of the stocks in Nikkei 225 Stock Average, 206 increased, 14 declined and 5 were unchanged.

The yen fell also for the third day against all its major counterparts due to the dollar gaining momentum after a survey showed U.S. consumer price index has dropped in April, albeit by a very small margin, damping demand for Japan’s currency.

The cabinet office and the Finance Ministry released a survey report of large manufacturers which showed that business sentiments have improved from three months ago, confirming that Japan’s export-led recovery is gaining traction.

Tankan survey, Japan’s most closely watched gauge of corporate confidence is due on July 1.

Japan’s 10-year yields rose to a one-week high after stocks gained amidst a report showing sentiments among large manufacturers improved, confirming reports the nation’s economic recovery is on track. The yield touched 1.245% on June 11, the highest since June 4.

The Ministry of Finance is scheduled to sell 1.1 trillion yen of 20-year bonds on June 16.

Honda Motor Co, gained in Tokyo after most workers reported for work at Honda Lock (Guangdong) Co in China after agreeing to an offer from the plant’s management.

“Operations of some facilities however remain halted as some workers have rejected the offer and Honda is considering shipping components from Japan if the plant can’t deliver those parts in time,” said Honda Lock’s spokesman Hirotoshi Sato in Japan today.

Nikkei Movers

Clarion Co Ltd led gainers in the Nikkei 225 Stock Average with a rise of 11.1% followed by OKUMA Corporation 5.4%, Fuji Electric Holdings Co., Ltd 5.4%, Tokai Carbon Co Ltd 5.3% and Showa Denko K.K 5.2%.

Kirin Holdings Company, Limited led the decliners in the Nikkei 225 Stock Average with a loss of 1.9% followed by Yamaha Corporation 1.2%, Resona Holdings, Inc 0.9%, SKY Perfect JSAT Holdings Inc 0.9% and Nomura Holdings, Inc 0.7%.

Other Movers

Asahi Breweries Ltd added 2.2% to 1,556.00 yen after the beer maker was upgraded to “outperform” from “neutral” at Mizuho Securities Co.

Cookpad Inc, the operator of a recipe website, advanced 4.8% to 9,230.00 yen.

Cybozu, Inc surged 16.0% to 40,750.00 yen after the company announced that it has raised year-end dividend forecast from 69.00 yen per share, which was announced on March 16 to 464.00 yen per share, for the fiscal year ending January 2011.

Daiwa House Industry Co Ltd increased 3.1% to 860.00 yen after the homebuilder was boosted to “overweight” from “neutral” at JP Morgan Chase & Co.

Honda Motor Co., Ltd rose 4.0% to 2,711.00 yen.

Tokyu Land Corp increased 5.1% to 347.00 yen after the developer was boosted to “outperform” from “neutral” at Credit Suisse Group.

Token Corp, the homebuilder, fell 4.1% to 2,522.00 yen.

Tokyo Dome Corporation, the baseball stadium operator, rose 4.2% to 245.00 yen.

Don Quijote Co., Ltd, the discount retailer, fell 0.8% to 2,445.00 yen.

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