Nikkei Index in Japan Rises 2.2%; Casio, Toyota, Fast Retailing Up

Devan Biswas
04 Nov, 2010
New York City

Stocks in Japan scaled higher after U.S. Federal Reserve announced larger than expected monetary stimulus. Resources and export sensitive stocks increased and the yen hovered near its recent highs. Casio Computer swung to net profit.

[R]5:00 PM Tokyo – Stocks in Japan scaled higher after U.S. Federal Reserve announced larger than expected monetary stimulus. Resources and export sensitive stocks increased and the yen hovered near its recent highs. Casio Computer swung to net profit. Fast Retailing soared after monthly sales declined abated.[/R]

Stocks in Tokyo trading surged after the U.S. Federal Reserve expanded the purchase of U.S. Treasuries by $600 billion. The move widely expected by investors exceeded to top end of the forecast of $500 billion.

The Fed’s move is tantamount to printing money to revive economic activities is expected to the U.S. economic recovery but is widely feared to fuel inflationary pressures. The dollar edged today in trading but is hovering near lows against the yen and the euro.

Nikkei 225 Stock Average increased 2.2% to 9,358.78 and the broader Topix Index added 1.6%.

Export sensitive and resource sector stocks gained in Tokyo trading. Honda Motor Co. led the most active stocks by value for the second day in a row and gained 1.5^ to 2,766 yen, Toyota Motor Corp gained 2.3% to 2,910 yen and Canon added 2.9% to 3,780 yen.

Casio Computer Co increased 2.2% to 570 yen after first half swung to net profit of 2.56 billion yen compared to a net loss in a year ago period.

Tokyo Electron increased 3.1% to 4,670 yen after the company increased its first half dividend to 38 yen and raised net income estimate by 4.8% to 66 billion yen.

Fast Retailing soared 8.1% to 11,700 after it reported domestic sales decline of 1.1% in October. The decline was the smallest in three months and revived the hopes consumer spending may lift the sales for the next two months.

Comparable stores sales are estimated to fall 9.8% in the second half and fall 4.7% in the first half according to the statement from the company.

Mineba Co. increased 7.5% to 461 yen after the company lifted its full year net estimate by 8% to 13.5 billion yen.

Suzuki Motor Corp increased 2.2% to 2,043 yen after the company lifted its annual net income outlook by 17% on higher sales in India and Asia. India based subsidiary is expected to sell at 100,000 units a month for the next six months.

Bank of Japan scheduled its 2-day policy meeting to begin today as it discusses the direction of monetary policy and asset purchase program. Governor Masaaki Shirakawa announced last week the plan to allocate 50 billion yen to purchase real estate securities and 450 billion yen to invest in exchange traded funds.

The move to purchase real estate securities had an impact on the REIT markets and prices have jumped in the last three weeks. Japan is battling two decade real estate prices slum where commercial real estate prices are at half the values and residential prices are at 40% off the peak in late eighties.