Nikkei Surges 4% in the Week; New Cabinet

Chandrasekhar Atreya
17 Sep, 2010
New York City

Stocks in Japan added more than 1% on Friday and gained 4% in the week and surged more than 9% in the month. The yen declined to five-week low against the dollar and the euro. Prime Minister Kan announced a new cabinet. Crude steel output rises in August, the tenth consecutive month of increase.

[R]5:00 PM Tokyo, Japan – Stocks in Japan added more than 1% on Friday and gained 4% in the week and surged more than 9% in the month. The yen declined to five-week low against the dollar and the euro. Prime Minister Kan announced a new cabinet. Crude steel output rises in August, the tenth consecutive month of increase.[/R]

Stocks in Japan rallied Friday, helped by a weaker yen, to push the benchmark index to a six-week high and also its best weekly performance this year.

The Nikkei 225 Stock Average added 1.23% or 116.59 points to close at 9,626.09. The broader Topix also climbed 0.9% to 852.09. For the week the Nikkei added 4.2% and surged more than 9% in September.

Of the 225 stocks in the index, 188 gained, 28 decreased and 9 were unchanged.

The yen traded at a five week low and one dollar fetched 85.67 and valued at 112.07 against the euro.

The Japanese cabinet resigned en masse Friday to make way for a revamped administration after Prime Minister Naoto Kan survived the ruling party’s leadership election on September 14. The new cabinet was appointed later in the afternoon.

Finance Minister Yoshihiko Noda defended his decision to intervene in currency markets for the first time in more than six years after the move spurred criticism from policy makers in the U.S. and Europe.

“I’m aware of the various comments, but with deflation, our economy is in a critical condition and it was undesirable that the strong yen be prolonged. I think it is important to explain that persistently to other nations,” Noda told reporters in Tokyo Friday.

Eiji Hayashida, Chairman of the Japan Iron & Steel Federation said Thursday domestic steel production may fall in the quarter ended December. At a regular news conference Hayashida said it is hard to deny an output slowdown in China and other Asian countries.

“We cannot expect that domestic production will recover either. Output for automakers might shrink, now that the government’s subsidy program for green car purchases has ended,” said Hayashida.

Foreign Minister Katsuya Okada accepted the Prime Minister Naoto Kan’s request Thursday afternoon to serve as the ruling party’s secretary general.

No moves have been made to arrange for talks between the Japanese and Chinese premiers later this month on the sidelines of the United Nations General Assembly meeting in New York, Chief Cabinet Secretary Yoshito Sengoku said Thursday.

P.T. Pertamina will buy stakes from Inpex Corp in two offshore oil and gas blocks in Indonesia, in a deal worth less than $50 million in total, an officer with the Indonesian state-owned oil and gas company said Thursday.

Microsoft Corp said Thursday the cumulative retail sales generated to date by Japanese games on its Xbox 360 console topped $2.1 billion, more than double the sales two years ago.

A team of researchers led by Ritsumeikan University professor Yasuhiro Tani said Thursday they have developed a polishing pad that uses zirconium, a readily available metal found worldwide, as an alternative to Cerium, which is available mostly in China.

Cerium, a silvery rare earth element, is used as a key component in polishing powders for such high-tech essentials like hard drives and thin film transistors.

Toyota Motor Corp said Thursday it aims to introduce an electric vehicle in China soon. Noting that the automaker is on track to enter the broader electric vehicle market by 2012, Vice Chairman Katsuaki Watanabe while speaking at an international conference in Chengdu, China, said “we are favorably considering a move into China as well.”

Kobe Steel Ltd said Thursday it’s wholly owned unit Kobelco Cranes Co will establish a joint venture in China to make crawler cranes.

Chengdu Kobelco Cranes Co will be created in October with a capital of 2 billion yen, with 51% of the capital from Kobelco Cranes and the balance from local partner Sichuan Chenggong Construction Machinery Co.

Crude steel output increased 7.1% in August from a year ago to 8.99 million tons, marking it the tenth month of rise in a row, the Japan Iron & Steel Federation reported Friday.

However, it was the first time that this growth has slowed below 10% in nine months, due to weaker demand from construction firms amid slowing public works projects.

The Japanese government’s outstanding payments exceeded those of private companies for the first time, in the April-June quarter, according to preliminary data released by the Bank of Japan on Friday.

The total liabilities of the central government, local governments, social security funds, climbed 3.3% from the previous quarter to 1,035.2 trillion yen, larger than that of private companies at 1,000.3 trillion yen, a drop of 7.1% from the previous quarter.