Yen Rises Again; Stimulus Plan Unveiled

Chandrasekhar Atreya
07 Oct, 2010
New York City

Stocks in Japan moved in a very narrow range to close little changed pulled by the opposing movements of a stronger yen and easing on monetary policy. Foreign exchange reserve reaches a new record in September. Ruling party in Japan unveils the final stimulus plan.]

[R]5:00 PM Tokyo, Japan – Stocks in Japan moved in a very narrow range to close little changed pulled by the opposing movements of a stronger yen and easing on monetary policy. Foreign exchange reserve reaches a new record in September. Ruling party in Japan unveils the final stimulus plan.[/R]

Japanese stocks like the Australian stocks traded within a narrow range but closed marginally lower. However, the broader Topix inched up fractionally led by retailers and banks.

The Nikkei 225 Stock Average lost 0.07% or 6.62 points to close at 9,684.81. The broader Topix inched up 0.2% to close at 846.06.

Of the 225 stocks in the Nikkei index, 108 gained, 101 decreased and 16 were unchanged.

Office vacancy in central Tokyo fell 0.16% to 9.01% in September, down for the first time in two months, real estate brokerage Miki Shoji said Thursday.

The vacancy declined after large office buildings signed many tenants last month. But smaller buildings are still struggling to find tenants for office spaces, said a Miki Shoji official.

Japan is considering making use of its $1.11 trillion foreign exchange reserves to create a sovereign wealth fund. If approved, Japan would join other countries like China, Russia and United Arab Emirates, to have a wealth funds that have taken greater role in global deal making.

It would also make Japan the first within the G-7 nations, which includes the U.S., U.K., Canada, France, Germany and Italy, to take such a step.

Japan’s foreign exchange reserves totaled $1.109 trillion at the end of September, up $39.446 billion from a month earlier, the Finance Ministry said Thursday.

The increased marks the fourth month in a row of increases and the country’s highest foreign exchange reserves on record.

The yen rose to a 15-year high against the dollar despite the Bank of Japan’s monetary easing announcement on Tuesday. The apparent contradiction is due to growing concern that bold monetary easing by the U.S. Federal Reserve is imminent, which would narrow the U.S.-Japan interest rate gap.

The dollar slipped to 82.75 yen, its lowest level in 15 years and 4 months, slipping below 82.87 yen, a level that triggered Japan’s first intervention in more than six years on September 15.

Japan’s ruling party unveiled Wednesday the final version of its economic stimulus plan, calling for more than 4.8 trillion yen in spending in an effort to boost the nation’s flagging economy.

The Democratic Party of Japan also recommended that Prime Minister Naoto Kan’s government to set up a national investment fund taking advantage of the nation’s vast currency reserves, without elaborating what kind of investments the fund would make.

One of the floors of the new terminal at Tokyo’s Haneda Airport, opened to the press Thursday, showcases a glimpse of Tokyo in the Edo Period (1603-1967). Overall, the five storey structure will accommodate about 100 outlets, including restaurants and high-end brand stores.

Electronic money transactions surged 54% in fiscal 2009 from a year ago to 1.25 trillion yen surpassing the 1 trillion yen for the first time since surveys began in fiscal 2007, the Bank of Japan said Wednesday.

Settlement amounts averaged 831 yen per transaction, up 14% from the year before and the number of transactions jumped 33% to 1.51 billion.

Daihatsu Motor, a subsidiary of Japan’s Toyota Motor Corp, said on Thursday it would recall almost 900,000 mini-vehicles in Japan due to defective door mirrors.

Japan’s small car maker is set to inform the Transport Ministry about a recall of 882,006 Move and Tanto models produced between October 2006 and April this year, said Daihatsu spokesman Fumihiko Kondo in Tokyo.

Toyota Motor said Thursday total global sales of its Prius hybrid topped the two million vehicles at the end of September.

Since its launch in 1997, the petrol-electric car sold about 2012,000 units the company said.

Gainers & Losers

Shinsei Bank Ltd led gainers in the Nikkei a gain of 10.17% to 65 yen followed by Aeon Co ltd 5.97% to 976 yen, Obayashi Corp 5.74% to 350 yen, Meidensha Corp 4.97% to 338 yen, Heiwa Real Estate 4.74% to 221 yen and Taisei Corp 4.49% to 186 yen.

Furukawa Co Ltd led decliners in the index with a fall of 4.26% to 90 yen followed by Pioneer Corp 4.1% to 281 yen, T&D Holding Inc 3.05% to 1,779 yen, Citizen Holdings 2.55% to 496 yen, IHI Corp 2.53% to 154 yen and Hokuetsu Kishu Paper Co Ltd 2.37% to 412 yen.