Nikkei Gains 1%; Convenience Stores Sales Drop 6%

Chandrasekhar Atreya
23 Nov, 2010
New York City

Tokyo stocks traded in a narrow range and gained nearly 1%. Diet postpones voting on supplementary budget. Creditors approve the bailout plan for JAL. Outstanding consumer loans drop 47% in September as lending rules tighten. Sales at convenience stores drop 6% in October.

[R]5:00 PM Tokyo, Japan – Tokyo stocks traded in a narrow range and gained nearly 1%. Diet postpones voting on supplementary budget. Creditors approve the bailout plan for JAL. Outstanding consumer loans drop 47% in September as lending rules tighten. Sales at convenience stores drop 6% in October.[/R]

Tokyo stocks traded in a narrow range to end with a gain of nearly 1% today.

The Nikkei 225 Stock Average gained 0.93% or 92.80 points to close at 10,115.19. The broader Topix also gained 5.96 to close at 875.48.

The yen declined and a dollar fetched 83.34 yen and the euro traded at 112.17 yen.

The Japanese government plans to have the stimulus measures passed by the upper house by Wednesday got a jolt when the Budget Committee members on Monday put off the voting on the supplementary budget.

The committee members from the Liberal Democratic Party and other opposition camps would not agree to hold a vote on the budget on Wednesday because of dissatisfaction over the government’s handling of a number of issues.

Sales at convenience stores in Japan fell 5.9% from a year ago in October, recording the first drop in four months, the Japan Franchise Association said Monday.

Sales of non-food items including cigarettes dropped 19.3%, the sharpest decline since the current model was adopted in 2005, with the number of customers dropping 4.4% for the first decline in five months.

The difference in the economy’s actual supply and demand capability came in at minus 3.5% in the July-September quarter, roughly equivalent to an annualized 15 trillion yen, according to a report from the Cabinet Office.

The report showed that the trend is on a recovery path that started after the January-March 2009 period, when the shortfall logged was a record 45 trillion yen.

Justice Minister Minoru Yanagida as expected decided to resign from his post after his remarks made at a party in Hiroshima were seen as showing disrespect to office. He met the Prime Minister Naoto Kan Monday and expressed his desire to step down owning responsibility for his remarks.

The creditors of Japan Airlines Corp agreed Monday the rehabilitation plan put forth by the ailing airlines and a state-backed bankruptcy administrator. JAL and the Enterprise Turnaround Initiative Corp of Japan are expected to submit their joint plan to the Tokyo District Court at the end of November.

A summit meeting is scheduled next month between the Japanese Prime Minister Naoto Kan and the South Korean Prime Minister Lee Myung Bak in Kyoto where it is expected that Japan will return some of the Korean archives according to sources.

Outstanding consumer loans at 62 money lenders in Japan dropped a record 46.7% in September to 262.8 billion yen, according to the Japan Financial Services Association.

The association said the revised money lending business laws that came into effect in June was the major reason for the drop. It said the revision imposed tougher rules limiting total loans to one-third of a borrower’s annual income besides lowering the highest allowable interest rate.

The KPMG Pulse survey done on 6,200 companies from most leading economies confirmed and corroborated last week’s forecast of Organization for Economic Cooperation and Development that predicted a decline in world growth in 2011 with no possibility of a double dip recession.

Almost all the waning optimism came from companies in the U.S. and Japan. The net balance in the U.S. service sector fell to plus 46 from plus 61.2, while in Japan the net balance fell to minus 0.7 in October.

Central Japan Railway Co said it plans to partner with 11 other Japanese companies to eventually bid for a high-speed rail system in the state of Florida in the U.S., according to the Nikkei.

The company aims to win an order for a 130 kilometer rail service between Tampa and Orlando in Florida, hoping to build a system similar to the Tokai Shinkansen bullet train it operates in Japan.