Nikkei Gains 1.8%, Crosses 10,000

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

Stocks in Japan advanced for the fifth consecutive day today after the Federal Reserve Bank of New York said its general economic index of manufacturing rose for the 11th consecutive month in June, adding to the buoyancy in the market.

[R]5:00 PM Tokyo, Japan – Japanese stocks traded higher for the fifth straight day and crossed the psychological barrier of 10,000. Japan’s Trade Ministry report says demand for service rose for the first time in three months. Nissan is planning to increase SUV production.[/R]

Stocks in Japan advanced for the fifth consecutive day today after the Federal Reserve Bank of New York said its general economic index of manufacturing rose for the 11th consecutive month in June, adding to the buoyancy in the market.

The Nikkei 225 Stock Average increased 1.81% or 179.26 to close at 10,067.15 above the psychological barrier line of 10,000 for the first time since May 20. The broader Topix also gained 1.5% to close at 892.38.

Of the stocks in Nikkei 225 Stock Average, 199 increased, 16 declined and 10 was unchanged.

Japan’s Prime Minister Naoto Kan may have to raise taxes to fulfill his promise to cap bond sales at the current value of 44 trillion yen, according to an independent advisor to the government.

At present the government is deliberating an annual public spending limit of about 71 trillion yen over the next three years, which seems to be inconsistent with the other target of limiting bond sales to the current existing levels, as this would leave a gap of 6 to 7 trillion yen between revenue and spending, said Toshiki Tomita, who advised the government on a mid-term fiscal plan scheduled for June release, in an interview in Tokyo today.

Honda Motor Co, grappling with a production crisis in China, is considering steps to improve communications between managers and employees.

“We couldn’t predict the strikes and we need to have more avenues for managers to listen to employees regularly,” Yoshiyuki Kuroda, a spokesman for the company said over phone today.

At present there are no effective channels in China for workers and management to negotiate, since discussions are now handled by government-linked union officials who are not elected by the workers.

The tertiary index, which captures 63% of Japan’s economy, gained 2.1% in April from March, indicating that demand for services rose for the first time in three months in the nation.

Today’s report released by the Trade Ministry in Tokyo adds to evidence that export-led recovery is prompting consumers to spend more in Japan. Some of the stimulus programs, including incentives for people to buy energy-efficient electronics, are scheduled to expire this year.

Starting this month, the current government will be offering families, a monthly allowance of 13,000 yen per child.

Nikkei Movers

Nikon Corp led gainers in the Nikkei 225 Stock Average with a rise of 5.6% followed by Mitsumi Electric Co Ltd 3.2%, Nissan Motor Co., Ltd 4.4% and JFE Holdings, Inc 4.4% and The Japan Steel Works Ltd 4.4%.

Oki Electric Industry Company, Limited led the decliners in the Nikkei 225 Stock Average with a loss of 1.2% followed by Fuji Heavy Industries Ltd 1.0%, Hitachi Zosen Corporation 0.7%, Panasonic Corporation 0.7% and Maruha Nichiro Holdings Inc 0.6%.

Other Movers

Canon Inc rose 3.8% to 3,880.00 yen.

Honda Motor Co., Ltd rose 1.5% to 2,758.00 yen after the company announced improvements to its BF150 (150PS) and BF135 (135PS) outboard engine series, popular for its outstanding fuel economy and other features.

Mitsubishi Corporation rose 2.2% to 1,931.00 yen after the trading company struck a deal with Buru Energy Ltd to farm into its Canning Superbasin project in Western Australia.

Nissan Motor Co., Ltd added 4.4% to 698.00 yen.

Nintendo Co., Ltd rose 5.1% to 26,580.00 yen.