Nikkei Gains; Toyota to Invest in Brazil

Chandrasekhar Atreya
09 Sep, 2010
New York City

Stocks in Japan gained after successful bond auctions in Portugal and Poland eased investor. U.S. Treasury auction of $21 billion also drew a strong interest from foreign central banks. Business sentiment index of large companies in Japan rises in the quarter.

[R]5:00 PM Tokyo, Japan – Stocks in Japan gained after successful bond auctions in Portugal and Poland eased investor. U.S. Treasury auction of $21 billion also drew a strong interest from foreign central banks. Business sentiment index of large companies in Japan rises in the quarter.[/R]

Stocks in Japan traded higher lifted by short-covering after successful bond auctions in Portugal and Poland helped ease worries over Europe’s debt problems.

The Nikkei 225 Stock Average added 0.82%or 73.79 to close at 9,098.39 and the broader Topix gained 0.7% to 826.84.

Of the 225 stocks in the average, 166 had gains, 42 fell while 17 remained unchanged.

Prime Minister Naoto Kan said Thursday the government will decide on the issue of lowering corporate tax rates only as part of its tax reforms for the next fiscal year.

Kan made this comment at the first meeting of a panel tasked with creating an economic revival and growth strategy.

Japan launched a panel on Thursday to discuss the way to implement the country’s new economic growth strategy compiled in June, joined by representatives from business, labor, academia, and the Bank of Japan.

Toyota Corp on Wednesday began building an assembly plant in Sorocaba, Brazil, to produce a small car for emerging markets. Small cars account for 70% of the nation’s overall auto market.

The automaker plans to spend $600 million to build its second assembly plant in Brazil, which is scheduled to start output in 2012 to manufacture 70,000 units annually.

Large companies in Japan are more optimistic about the outlook for the economy in the July-September quarter than the previous quarter, according to a survey released Thursday by the Ministry of Finance.

The large company business sentiment index, which measures the percentage of companies saying that the economy will improve minus those that say it will get worse, was at 7.1 in this quarter, from 4.0 in the previous quarter.

Microsoft’s Japanese unit said Wednesday that it will launch its Kinetic add-on for its Xbox 360 game console, which lets users navigate games through body movements, in Japan on November 20.

Japan climbed two places from last year to sixth in the 2010 global competitiveness ranking unveiled by the World Economic Forum Thursday. While Switzerland retained its first position, Sweden rose to second position and Singapore third.

Even though the nation’s public sector received poor marks, especially for the size of its debt, the private sector was rated highly enough to lift the nation’s overall ranking. The improvement also stemmed from a fall in the rankings of some European countries hit by the Greek sovereign debt crisis.

Industrial machinery orders fell 5.1% year-on-year in July to 323.25 billion yen, the Japan Society of Industrial Machinery Manufacturers said Thursday, marking the first decline in two months, weighed down by a 20.5% drop in overseas orders.

Environmental equipment orders rose 1.7% in July from a year earlier to 37.09 billion, the Japan Society of Industrial Machinery Manufacturers said Thursday.

The Japanese economy is likely to expand 1.93% in the current fiscal year on a price-adjusted basis, 57 basis points lower than the previous estimate, according to an average of forecasts by private sector economists in a recent survey.

Daikin Industries Ltd said it plans to begin domestic production of its largest commercial air-conditioning system from next January instead of importing them from a U.S. subsidiary.

The company plans to spend more than 400 million yen to install production and inspection equipment at a plant on Osaka Prefecture by the end of this year.

China bought a record amount of Japanese debt this year when it purchased a net of 640.8 billion yen in short-term bills in July. It total buy of Japanese debt rose to about 2.3 trillion yen this year, a record since data started to be collected in 2005.

Finance Minister Yoshihiko Noda told lawmakers in Tokyo that it’s inappropriate for China to buy Japanese bonds without a reciprocal ability for Japan to invest in China’s markets.

“I feel strange that China can buy Japanese government bonds while Japan cannot buy theirs, and there is room to discuss that,” said Noda at the same meeting.

Gainers & Losers

Trend Micro led the gainers in the Nikkei with a rise of 10.27% to 2,576 yen followed by Toto Ltd 4.74% to 574 yen and NTN Corp 4.5% to 348 yen.

Mitsui Fudosan led the decliners in the index with a drop of 3.56% to 1,353 yen followed by Sumco Corp 3.04% to 1,274 yen and Kajima Corp 2.46% to 198 yen.