Japan Expands at 3.9%; Mitsubishi UFJ Net Doubles

Marcus Jacob
15 Nov, 2010
New York City

Stocks in Tokyo trading increased after Japan reported faster than expected economic expansion and the yen weakened. The economic growth in the fiscal second quarter increased to annual rate of 3.9% from the revised 1.8% rate in the first. Banks and exporters gained in trading.

[R]5:00 PM Tokyo – Stocks in Tokyo trading increased after Japan reported faster than expected economic expansion and the yen weakened. The economic growth in the fiscal second quarter increased to annual rate of 3.9% from the revised 1.8% rate in the first. Banks and exporters gained in trading.[/R]

Japan reported economy in the fiscal second quarter ending in September expanded at 3.9% as the domestic consumption increased.

The economic growth in the fiscal first quarter was revised higher at 1.8%, according to the latest data released by the Cabinet Office. However, economists were not that positive about the current quarter.

After removing the increase in 1.1% in the household spending, the economy may not grow any faster than 0.3% and by some estimates may be shrinking in the quarter ending in December.

The revival in the domestic consumption was driven the one-time subsidy for the purchase of fuel-efficient cars and the increase in cigarettes sales ahead of tax increase on October 1.

The economy in the first half ending in September was estimated at $3.967 trillion, still ahead of the Chinese economy at $3.94 trillion according to the latest data released by the government.

The Nikkei 225 Stock Average closed up 1.06% to 9,827.51 and the broader Topix index added 0.54% to 851.56.

Stocks gained after the economy expanded at higher than expected rate and the yen weakened.

The yen traded at 82.77 to a dollar and 113.645 to a euro and the yield on 10-year note closed at 2.815%.

Mitsubishi UFJ Financial Group Inc said net income in the first half to September increased to 357 billion yen from 141 billion yen a year ago period. The largest publicly traded bank also lifted full year net estimate to 500 billion yen from 400 billion yen.

Net interest income declined to 1 trillion yen from 1.1 trillion yen in the period a year ago and bad loans expenses declined to 186.7 billion from 444.2 billion yen.

Stock Movers

Exporters and auto makers traded higher.

Olympus Corp increased 3.7%, 2,248 yen and Sony Corp increased 2.7% to 2,789 yen and Sharp Corp increased 1.9% to 828 yen. Nikon Corp increased 0.8% to 1,668 yen and recently lowered its earnings estimate.

Fast Retailing Co. Ltd surged 2.4% to 12,500 yen.

Mitsubishi UFJ Financial Group Inc declined 0.3% to 391 yen and the bank reported higher profit and a plan to buy project-finance assets from Royal Bank of Scotland Group Plc for 3.8 billion pounds.

Toyota Motor Corp increased 1.45% to 3,140 yen and Honda Motor Corp increased 1.7% to 3,035 yen. Nissan Motor Co Limited increased 1.55% to 785 yen.