Nikkei Gains; July Vehicle Sales Up 15%

123jump.com Staff
02 Aug, 2010
New York City

Stocks in Japan gained on earnings outlook. Former central bank deputy governor said targeting inflation is not the correct way to end deflation. Monthly wages rises in June. Sales of cars, trucks and buses rise 15% in July from a year earlier led by Toyota Motor and Honda Motor Co.

[R]5:00 PM Tokyo, Japan – Stocks in Japan gained on earnings outlook. Former central bank deputy governor said targeting inflation is not the correct way to end deflation. Monthly wages rises in June. Sales of cars, trucks and buses rise 15% in July from a year earlier led by Toyota Motor and Honda Motor Co.[/R]

Japanese stocks gained after two days of declined as company earnings boosted investor sentiments, while banks declined. The index gained in the mid-afternoon session but closed lower in the evening session.

The Nikkei 225 Stock Average gained 0.35% or 33.01 to close at 9,570.31. The broader Topix rose 0.1% to 850.69 after climbing as much as 1.1% during the day’s trading.

Consumer prices in the country have been falling for 16 months, while a rising yen threatens to contribute to deflation by lowering import costs. The policy makers from the ruling party and the opposition are pressurizing the Prime Minister to make the central bank target specific inflation levels.

Former Deputy Governor of the central bank Toshiro Muto to say, inflation targeting by Bank of Japan would do little to end deflation at a forum hosted by Bloomberg News in Tokyo on July 30.

Wages rose for the fourth month as employers had their staff work more hours instead of adding more employees, a trend that may sustain the recovery without reducing the reliance of the economy on exports to propel growth.

Monthly wages including overtime and bonuses went up 1.5% in June from a year earlier to 437,677 yen, the Labor Ministry said in Tokyo today. Special pay that includes bonuses gained 3.3% to 173,851 yen while overtime hours climbed for the sixth month on year-on-year basis.

Astellas Pharma Inc, Japan’s second-biggest drug maker, cut its profit forecast by 12%, and said that earning may fall further after the company includes acquisition costs relating to the takeover of OSI Pharmaceuticals Inc for $4 billion.

Net income will drop to 94 billion yen in the year ending March 2011, lower than the previous forecast of 107 billion and sales will be 2.8% less than forecast at 914 billion yen, Tokyo-based Astellas said today.

Toyota Motor Corp and Honda Motor Co, Japan’s two biggest automakers, led the 12th straight increase in the nation’s monthly auto sales as government incentives boosted demand.

Sales of cars, trucks and buses excluding mini cars rose 15% to 333,403 units in July from a year earlier, the Tokyo-based Japan Automobile Dealers Association said in a statement today. Of these Toyota sold 161,444 vehicles excluding Lexus-brand cars.

NTT DoCoMo Inc, Japan’s largest mobile phone operator agreed to pay $111.6 million to buy shares of PacketVideo Corp it doesn’t already own to help boost its data services.

DoCoMo which last year bought about 35% stake in the U.S. wireless software company for $45.5 million reached an agreement with NextWave Wireless Inc to buy the remaining shares, the Tokyo-based company said in a statement today.

Tokyo Stock Movers

Brother Industries Ltd gained 1.7% to 942 yen after the office-equipment maker said first quarter net income surged to 8.74 billion yen from 3.4 billion yen as sales climbed.

Chugoku Bank Ltd gained 0.5% to 1,012 yen after the lender said its net income for the quarter ended Jun jumped 75% to 5.41 billion yen while revenue slumped 13%.

Fujikura Ltd gained 1.2% to 411 yen after the cable maker increased its full year net income target by 21% to 8.5 billion yen.

Funai Electric Co gained 0.7% to 3,105 yen even after its first quarter net income came down to 433 million from 3.17 billion a year ago.

Ibiden Co lost 0.8% to 2,561 yen after the company booked a 30% gain in first quarter net income to 3.03 billion yen on a 12% increase in sales.

Japan Steel Works Ltd gained 1.3% to 845 yen after reporting a 15% drop in first quarter net income to 2.9 billion yen with lower sales.

Kissei Pharmaceutical Co rose 0.4% to 1,660 yen after reporting operating profit for the quarter ended June of 2.07 billion yen, up 23%.

Point Inc gained 0.2% to 4,360 yen after registering 1.9% increase in same-store-sales in July with a 4.5% rise in customer traffic year-on-year.

Ricoh & Co gained 3% to 1,233 yen after the office equipment maker forecast 12.5 billion of net income in the six months to September against its earlier forecast of 8 billion.

Tokai Rika Co gained 1.6% to 1,490 yen after reporting a surge in first quarter sales by 32% to 83.8 billion yen.