Nikkei Rebounds 2.3% on U.S. Gains

Chandrasekhar Atreya
23 Jul, 2010
New York City

Nikkei gained after six days of weakness on better than expected U.S. earnings. Sumitomo

[R]5:00 PM Tokyo, Japan – Stocks in Japan gained after six days of decline on better than expected U.S. corporate earnings. Sumitomo’s Brazilian venture plans to increase output by 67%. Japan plans to talk to Russia for shipping uranium from its east coast. Mercedes Benz is likely to top Toyota made Lexus as the top rated luxury sedan in the U.S.[/R]

Stocks in Japan gained following six days of decline after Wall Street surged on strong earnings results from Caterpillar, AT&T, 3M, UPS, American Express and Microsoft. The yen also weakened boosting exporters.

The Nikkei 225 Stock Average soared 2.28% or 210.08 to close at 9,430.96. The broader Topix gained 1.9% to close at 841.29 with about seven shares advancing for each that declined.

The Nikkei gained 0.2% this week but finished below the 10,000 mark for the 10th consecutive week. The Topix gained 0.1% in the week.

In the Nikkei 225 Stock Average, 209 stocks gained, 8 lost and 8 remained unchanged.

Sumitomo Corp, a Japanese trading company, said its venture with Brazil’s Belo-Horizonte-based Usiminas may increase iron ore production by two thirds to cater to burgeoning demand from Asia.

This venture, Usinas Siderurgicas de Minas Gerais SA, may be able to boost estimated annual production of iron ore from its current proposal of 30 million tons to 50 million tons by 2015.

The venture could further expand output by buying or developing mines or paying royalties to producers near its project in the Serra Azul region, said Sumitomo’s Managing Executive Officer Toru Furihata in an interview in his Tokyo office.

Japan plans to ask Russia to allow it to ship uranium from landlocked Kazakhstan through ports along the country’s pacific coast to cut freight and travel time. Right now the fuel is shipped to Japan after enrichment from the western ports of Russia and the proposed eastern route could help reduce costs to companies including Marubeni Corp, Sumitomo Corp and Tokyo Electric Power Co that have invested in uranium ventures in Kazakhstan.

“Russia can play a key role and make a big change to Japan’s uranium supply chain in years ahead as Japan is increasing purchases from Kazakhstan,” said Tomoko Murakami, a nuclear analyst at the Institute of Energy Economics.

After being the top ranked car brand in the U.S., Toyota Motor’s Lexus risks relinquishing its position among luxury brands to Daimler AG’s Mercedes Benz. The Lexus brand, a benchmark for quality in 1990s and 2000s, has been marred by record recalls this year for various flaws across its lineup.

“It is very likely that Mercedes Benz may take over the lead this year. The cumulative effect of all the recalls hasn’t really shown up yet. It’s more likely to be seen in the second half,” said Jesse Toprak, Vice President of Industry Trends for researcher Truecar.com in Santa Monica, California.

Gainers and Losers

Casio Computers led the gainers in the Nikkei 225 with a gain of 6.62% to 596 yen, followed by Shinsei Bank 6.45% to 66 yen and Asahi Glass 6.05% to 841 yen.

Tokyo Gas Co led the decliners with a fall of 1.26% to 392 yen followed by Furukawa Co 1.11% to 89 yen and Nippon Telegraph 0.96% to 3620 yen.