Nikkei Gains, Retail Sales, Domestic Passenger Car Output Decline

Chandrasekhar Atreya
29 Nov, 2010
New York City

Stocks in Japan closed higher and the yen weakened after a rally in Asian markets. October retail sale declined and domestic passenger car production declined in the month. The Government Pension Investment Funds gained int eh September quarter after falling for two quarters in a row.

[R]5:00 PM Tokyo, Japan – Stocks in Japan closed higher and the yen weakened after a rally in Asian markets. October retail sale declined and domestic passenger car production declined in the month. The Government Pension Investment Funds gained int eh September quarter after falling for two quarters in a row.[/R]

Stocks in Tokyo closed higher as markets in Asia rally and commodities rebounded. The European Union and Ireland agreed on the 85 billion euros bailout in the late evening on Sunday at a steel interest rate of 6.7%.

Tokyo stocks opened higher and gained as much as 100 points in the morning session but edged lower in the afternoon to close at five month high.

The Nikkei 225 Stock Average gained 0.83% or 82.53 to close at 10,122.09 and the yen closed at 84.07 to a dollar.

Bank of Japan Governor said today that the central bank continues to watch closely the movement of the yen and evaluates its long term and short term implications.

“The BOJ examines in detail the foreign exchange developments and their implications with great interest, acknowledging that the rising yen depresses the revenue and profit of export-oriented firms in the short-term and has a positive effect of bringing about improvement in import trade through a price decline which in turn leads to an increase of overall real income in Japan,” he told business leaders in Nagoya in Central Japan, one of the country’s major export centers.

Retail sales in Japan fell 0.2% in October from the previous month, first decline after increasing for nine months in a row, the government said today.

Sales in declined in the month after September sales increased 1.2% and after the subsidies for the purchase of new cars expired in the month.

Domestic passenger car output in October fell for the first time in a year following the withdrawal of government subsidies in September for fuel efficient models.

The eight leading Japanese automakers built 717,332 cars in October, 9.4% decline from a year earlier. Toyota Motor Corp production was 237,089, 22.4% lower than a year ago, the lowest October output in 33 years.

China proposed on Sunday emergency consultations early December in Beijing by the heads of the delegations to the six-party talks to discuss the complicated issues that have emerged from the conflict in the Korean Peninsula.

Special representative of China for Korean Peninsular affairs Wu Dawei made the announcement as China engages in high-level diplomacy to cool tensions in the area.

The Government Pension Investment Fund said Friday last week that the fund generated 1.77 trillion yen in gains in the quarter ending in September, after two quarterly losses in a row.

The fund lost 3.59 trillion yen in the April-June quarter when share prices dived at domestic and international markets as debt contagion fears in Europe dragged world markets lower.

Toshiba Corp and El Araby of Egypt have successfully concluded talks to build a new LCD TV plant in Egypt, to tap the potential demand in the Middle East and North Africa, a company spokesman said today.

Masaaki Osumi, President of Toshiba Corp’s Visual Products Co at a press conference in Tokyo said that the companies plan to begin production before the end of first quarter next year.

Stock Movers

Exporters declined as the yen weakened against the dollar and commodities rebounded.

Nissan Motor Co added 1.51% to 785 yen and Sony Corp gained 2.5% to 2,970 yen after Nomura Holdings Inc boosted its recommendation the stock with a “buy” rating.

Honda Motor Co added 0.5% to 3,090 yen and Kyocera Corp added 1.1% to 8,530 yen.

Marubeni Corp advanced 3.6% or 19 yen to 554 yen after Goldman Sachs raised its rating on the firm from “neutral” to “buy.”

Sojitz Corp gained 3.7% to 168 yen and Itochu Corp added 1% to 786 yen.

Taiheiyo Cement Corp, the largest cement producer in Japan, added 3.9% or 4 yen to 106 yen after the Nikkei Newspaper reported that the company’s profit will likely jump without citing anyone.