Nikkei Gains; DPJ Leadership Race Tightens

Chandrasekhar Atreya
01 Sep, 2010
New York City

A better-than-expected Chinese manufacturing and GDP expansion in Australia helped the benchmark index in Tokyo. The two-week leadership race for the ruling party began today. Car subsidies may end earlier than the deadline set by the government.

[R]5:00 PM Tokyo, Japan – A better-than-expected Chinese manufacturing and GDP expansion in Australia helped the benchmark index in Tokyo. The two-week leadership race for the ruling party began today. Car subsidies may end earlier than the deadline set by the government.[/R]

Japanese stocks traded bearishly Wednesday morning keeping the index hovering around the year-to-date low set Tuesday. The afternoon trading helped the index rally after better-than-expected growth in Chinese manufacturing and Australian economy.

The Nikkei 225 Stock Average increased 1.17% or 102.96 to close at 8,927.02. The broader Topix advanced 0.8% to 811.4 with about four shares closing higher for every three that declined

Of the 225 stocks in the index, 182 gained, 37 fell and 6 were unchanged.

Democratic Party of Japan’s two-week leadership race began Wednesday with Prime Minister Naoto Kan facing a tough battle to stay in power against the ruling party’s veteran leader Ichiro Ozawa.

The Renault SA-Nissan Motor Co alliance plans to increase production in South Korea to cut manufacturing in Japan as the yen strengthens, Chief Executive Carl Ghosn said.

“With the strengthening of the yen and the competitiveness of the yuan, those who have capacity in Korea today have a plus,” Ghosn told a media roundtable in Abu Dhabi Monday.

Japan Airlines Corp will aim for positive net worth by the end of next March by asking its creditor bank to waive a combined 521.5 billion yen in debt and receiving a capital injection of 350 billion yen from the government-affiliated Enterprise Turnaround Initiative Corp of Japan, according to a business turnaround plan submitted Tuesday to the Tokyo District Court.

The subsidies for eco-friendly vehicles issued by the government are increasingly likely to run out before the scheduled deadline at this month end. Since July, when the government set the deadline for subsidies on vehicles that meet certain fuel efficiency and other standards, purchases and applications for subsidy claims have surged.

Applications have been averaging around 2 billion yen a day and have jumped to 3.3 billion yen since August 17 and on Monday reached record 4.3 billion yen.

Tokyo Gas Co said Tuesday it will branch out into the business of operating LNG vessels equipped with regasification facilities, by taking a minority 1.5% stake in two LNG vessel joint ventures operated by Mitsui O.S.K Lines and Ltd and Norway’s Hoegh LNG.

The investment is believed to be part of the natural gas company’s plans to make an entry into overseas gas operations.

The Osaka Securities Exchange said Tuesday that it has signed an agreement covering product development and cooperation in other fields with China’s Shenzhen Stock Exchange.

The Jasdaq Securities Exchange, which integrated its operations with the Osaka bourse in April, has already signed an agreement with the Chinese bourse. The OSE moved to sign a deal with the Shenzhen exchange ahead of the planned launch of a new Jasdaq stock exchange in October through the merger of its Hercules and Jasdaq start-up markets.

Japan’s currency authorities didn’t take any intervening action in the foreign exchange market in August, the Ministry of Finance said Tuesday as it did not intervene in the market between July 29 and August 27, as expected by the market.

Japan has stayed out of the currency market since March 2004, when it abruptly ended a 15-month intervention campaign in which it sold 35 trillion yen, mostly for dollars, in a bid to keep a stronger yen from snuffing out an economic recovery.

Toyota Motor Corp and Honda Motor Co led the thirteenth monthly increase in the country’s auto sales as government incentives boosted demand.

Sales of cars, trucks, and buses, excluding mini cars, rose 47% to 290,879 units in August from a year earlier. Toyota sold 130,092 units excluding Lexus-brand cars, up 43%, the Japan Automobile Dealers Association said Wednesday.