Nikkei Rebounds; Tokyo Office Vacancy Drops

Chandrasekhar Atreya
05 Aug, 2010
New York City

Stocks in Japan rallied to gain on faster-than-estimated growth in U.S. service industries. Office vacancy rate drops from a record high. Horiba plans to put up an emission testing plant in China.

[R]5:00 PM Tokyo, Japan – Stocks in Japan rallied to gain on faster-than-estimated growth in U.S. service industries. Office vacancy rate drops from a record high. Horiba plans to put up an emission testing plant in China.[/R]

Japanese stocks rose for the third day in the week regaining most of the ground lost on Wednesday after the greenback rebounded from an eight-month low against the yen. The report of a faster-than-estimated growth in U.S. service industries also helped ease investor concerns.

The Nikkei 225 Stock Average gained 1.73% or 164.58 to close at 9,653.82. The broader Topix index gained 1.3% to close at 857.09 with more than four stocks advancing for everyone that declined. All 33 industry groups in the index climbed in the trade.

Nomura Holdings Inc plans to increase its commodity and energy derivatives trade in Japan five-fold or more in three years as producers seek to hedge fuel and raw materials against price movements.

“The oil price spike in 2008 and big swings in commodities over the past few years spurred Japanese manufacturers to reduce risks associated with material costs,” said Takashi Toyahara, the head of commodity sales at Nomura Securities Co in Tokyo yesterday.

Office vacancy rates in Tokyo fell in July from a record high, according to Miki Shoji Co, a privately held office brokerage company. The measure of unoccupied office units fell to 9.1% last month, marking the first decline since January 2008, Tokyo-based Miki Shoji said in a report.

Horiba Ltd, the world’s largest maker of automobile emission testing devices, plans to invest up to 1 billion yen to build a plant in China amid rising demand from Toyota and other car makers.

The company expects to start the construction in early 2012 to produce devices for testing engines, brakes and other automobile-related equipment, President Atsushi Horiba said yesterday in an interview in Osaka. This will be the first such plant to be built in China.

Japanese Trade Minister Masayuki Naoshima said today in parliament that something needs to be done to alleviate the risks to exporting companies posed by the rising yen.

“I’m concerned about the strong yen. Japanese companies are facing significant currency risks in their business compared with Chinese and South Korean counterparts. We need some kind of response,” he said in his speech.

Gainers & Losers

Mitsubishi Estate, Japan’s biggest developer by market value, climbed 5.5% to 1,277 yen. Mitsui Fudosan Co, the biggest developer by sales, climbed 5.7% to 1,340 yen.

Sumitomo Realty & Development Co also gained by 5.5% to close at 1,628 yen.

Isuzu jumped 6% to 264 yen, the largest gainer in the Nikkei Average and Toyota Motor Corp added 0.5% to 3,105 yen.

Orient Land Co, the operator of Tokyo Disney Resort, gained 5.3% to 7,600 yen, after reporting a surge in first quarter net income.

Asics Corp, the sports-equipment maker, added 5% to 878 yen after reporting its first quarter net tripled.

Mitsui & Co, Japan’s second-biggest commodity trader, gained 4.7% to 1,192 yen after its rating was kept as “buy” by Deutsche Bank AG.

Trend Micro Inc, the third security software developer in the world, declined the most by 3.8% to 2,442 yen.