India, Japan Sign Free Trade Agreement, Explore Rare Earth Minerals

Chandrasekhar Atreya
26 Oct, 2010
New York City

Tokyo stocks closed lower as the yen hovered near recent highs and the dollar resumed its slide. Stocks of utilities gained but brokers and financials edged lower. Japan approves 4.42 trillion yen of supplementary budget allocation. India and Japan agree to cut tariff on most items.

[R]5:00 PM Tokyo, Japan – Tokyo stocks closed lower as the yen hovered near recent highs and the dollar resumed its slide. Stocks of utilitie gained but brokers and financials edged lower. Japan approves 4.42 trillion yen of supplementary budget allocation. India and Japan agree to cut tariff on most items and carry out a joint exploration of rare earths.[/R]

Stocks in Tokyo trading fluctuated with utilities trading higher and brokers trading lower. The yen hovered near recent highs and the dollar resumed its slide against major currencies.

The Nikkei 225 Stock Average lost 0.25% or 23.78 to close at 9,377.38. The broader Topix lost 0.4% to close at 817.94.

Of the 225 stocks in the Nikkei, 72 gained, 128 decreased and 25 were unchanged and the yen closed in Tokyo trading on Tuesday at 80.97 yen to a U.S. dollar.

An appropriate rate for the Japanese currency is around 90 yen to a dollar, Japan Iron and Steel Federation Chairman Eiji Hayashida told reporters on Monday. The slowdown in exports and production is due to the stronger yen, Hayashida said.

The Japanese cabinet approved today a 4.42 trillion yen supplementary budget for fiscal year 2010 with the aim of giving an estimated 4.85 trillion yen boost to the economy.

The government also plans to bring forward projects worth 238.8 trillion yen which would have been normally budgeted for next fiscal year. The additional stimulus plan includes measures to help new graduates land jobs, expand the scope of subsidies for housing through eco-points, and additional funds that provide support to families with children.

Japan’s Foreign Minister Seiji Maehara said Tuesday that Japan along with three other countries interested in joining the trans-Pacific free trade agreement will exchange views on November 9 in Yokohama with the nine nations currently negotiating.

Nissan Motor Co said Tuesday it will start selling its hybrid car, a version of its Fuga luxury car, on November 2. The car us designed to run 19 kilometers per liter.

The hybrid system power the car with a 3.5 liter engine and an electric motor and will be the country’s first model with a motor powered by a high-performance lithium ion battery.

Corporate services price index for September reached its lowest level since Bank of Japan started compiling data in January 1985, the central bank said Tuesday.

The index fell 1.1% from lat year to 96.7, marking it the 24th month of decline in a row. The drop was 0.1% from August of this year.

India and Japan concluded a partnership agreement on Monday calling for elimination of custom duties on 94% of traded items between the two countries. The two countries have relatively small trade of $7 billion whereas Japan trade with China is more than $250 billion.

Tariffs on 90% of Japan’s exports to India and around 97% of India’s exports to Japan will be eliminated over the next decade.

Domestic shipment of consumer appliances rose 26.2% in September from a year ago to 334.8 billion, marking the 14th month in a row of rises, the Japan Electronics and Information Technology industries Association said Monday.

BP agreed to sell four of its fields in the Gulf of Mexico deep waters to Japan’s Marubeni Corp for $650 million, as the oil company raises cash to pay for the Gulf of Mexico oil spill.

BP is committed to selling up to $30 billion in non-core assets to pay for the clean up of the worst ever oil spill in the United States and also pay compensation to the victims. The four fields are Magnolia, Merganser, Nansen, and Zia fields, representing about 15,000 barrels of oil equivalent per day output.

Gainers & Losers

JX Holdings led gainers in the Nikkei with a rally of 2.33% to 484 yen followed by Toho Zinc Co Ltd 2.27% to 361 yen, Kikkoman Corp 2.17% to 895 yen, Osaka Gas Co Ltd 2.05% to 299 yen, IHI Corp 2.01% to 152 yen and Nitto Boseki Co 2.01% to 203 yen.

Nippon Soda Co led decliners in the index with a drop of 5.39% to 351 yen followed by Sojitz Corp 3.38% to 143 yen, Casio Computers 3.04% to 575 yen, Nippon Light Met 2.84% to 137 yen, Fukuoka Financials 2.47% to 316 yen and Yahoo! Japan Corp 2.4% to 28,120 yen.