Nikkei Gains; Nissan Kyushu Plant Spin-off

Chandrasekhar Atreya
06 Oct, 2010
New York City

Stocks in Japan rallied for a second day and rose 1.8% to reach a two-month high led by financial and property stocks. Sale of imported cars rises in the first half by 35% to cross 100,000 units. Toyo acquires Canada based Tri Ocean Engineering.

[R]5:00 PM Tokyo, Japan – Stocks in Japan rallied for a second day and rose 1.8% to reach a two-month high led by financial and property stocks. Sale of imported cars rises in the first half by 35% to cross 100,000 units. Toyo acquires Canada based Tri Ocean Engineering.[/R]

Japanese stocks extended their gains for a second day on the interest rate cut to lift the index up 1.8% to a two-month high on the rise in financial and property sectors. The continued strength of the yen weighed on shares of exporters.

The Nikkei 225 Stock Average gained 1.81% or 172.67 points to close at 9,691.43, highest close since August 3. The broader Topix rose by 1.4% to 844.50.

Of the 225 stocks in the Nikkei index, 201 gained, 19 decreased and 5 were unchanged.

The Bank of Japan grew more cautious in its stance towards the nation’s economy in October, amid mounting uncertainty over the outlook of global economy and the impact of a still strong yen.

“Japan’s economy still shows signs of a moderate recovery, but the pace of recovery is slowing down,” the central bank said in its monthly economic report released Wednesday.

Sales of imported cars climbed 34.7% from a year ago in the first half of the year to 119,053 vehicles, for the first increase in three years, according to preliminary data released Wednesday by the Japan Automobile Importers Association.

For the first time in two years, the half-year exports surpassed 100,000 units.

Toyota Motor Corp’s Prius hybrid topped the domestic car sales in September, leading the industry sales for the sixteenth month in a row, according to data released from the industry group released on Wednesday.

But sales of Prius fell 14.2% on the year to 27,249 units, after the government terminated its subsidy for environmentally friendly vehicles on September 7.

Nissan Motor Co said Tuesday it is considering spinning off its Kyushu plant, its largest domestic production facility, driven by a stronger yen and the growing might of emerging market automakers.

Through talks with labor, the automaker hopes to create a new company incorporating the plant in the autumn of 2011. The 3,600 workers employed in the plant will in principle be transferred to this wholly owned firm, the company said.

Mizuho Securities Co said Tuesday it plans to offer foreign exchange margin trades from January 2011.

The brokerage firm applied to the Tokyo Financial Exchange’s Click 365 market that day, with approval likely to take around one month. After upgrading the internal systems, Mizuho Securities aims to launch the services.

Toyo Engineering acquired Tri Ocean Engineering Ltd from ASRC Energy Services Ltd, a subsidiary of Arctic Slope Regional Cooperation. Tri Ocean is an engineering firm located in Calgary, Alberta, Canada and provides engineering and project management services for Canadian upstream oil and gas and oil sands industries for long-term agreements.

Gainers & Losers

Sojitz Corp led gainers in the Nikkei with a gain of 8.9% to 159 yen followed by Sumitomo Osaka 8.63% to 151 yen, Mizuho Financial 8.62% to 126 yen, CSK Corp 7.69% to 322 yen, Toho Zinc Co Ltd 7.69% to 364 yen and Tokyo Tatemono 7.45% to 346 yen.

Nissan Motor Corp led decliners in the Index with a drop of 2.4%to 731 yen followed by Fuji Heavy Industries 1.96% to 549 yen, Shiseido Co Ltd 1.89% to 1,815 yen, Panasonic Electrical 1.35% to 1,095 yen, All Nippon Airways 1.32% to 299 yen and Ricoh Co Ltd 1.29% to 1,229 yen.