Nikkei Gains; Quarterly Business Investments Rises 5%

Chandrasekhar Atreya
02 Dec, 2010
New York City

Tokyo stocks surged the most in two weeks on positive U.S. economic data. Business investment in September quarter rises 5%, breaking a three-year losing streak. Tobacco Tax revenue surges 120% in October from a year earlier. Year-end bookings by tourists to China drop 50%.

[R]5:00 PM Tokyo, Japan – Tokyo stocks surged the most in two weeks on positive U.S. economic data. Business investment in September quarter rises 5%, breaking a three-year losing streak. Tobacco Tax revenue surges 120% in October from a year earlier. Year-end bookings by tourists to China drop 50%.[/R]

Tokyo stocks traded higher for the second day pushing the benchmark index up by the most in two weeks following U.S. economic reports that payrolls and manufacturing climbed in November.

The Nikkei 225 Stock Average rose by 1.81% or 180.47 points to close at 10,168.52. The broader Topix climbed 1.3% to 877.21, with more than five shares advancing for each that fell.

Business investment in the quarter to September snapped a three-year losing streak and gained modestly, data released today showed.

The survey by the Ministry of Finance showed that capex in the period increased 5% from a year earlier to 9.555 trillion yen, after falling 1.7% and 11.5% in the first quarter and second quarter respectively.

Skymark Airlines Inc said Wednesday that it plans to hire 470 workers who are leaving struggling rival Japan Airlines Corp, ahead of its planned launch of international services in 2014.

Around 120 pilots and 50 ground staff will be recruited as needed, starting on contractual basis and hire 100 flight attendant by the end of March. The airline also said all workers below 35 years of age will be given regular positions after trial, while those above 35 will work on contract basis.

The ruling Democratic Party of Japan and a junior coalition partner PNP confirmed today after a Diet committee meeting that they will stop discussing a bill to reverse postal privatization in the current session of the Diet.

Instead they have agreed to resume talks on the bill at a later date.

Tobacco tax revenue in Japan surged 120% in October from a year ago to 163.2 billion, the Finance Ministry said on Wednesday.

The collections were more due to higher shipments in September, which surged ahead of an October 1 tax hike on tobacco. Tobacco sales volumes plunged 69.9% in October, according to the Tobacco Institute of Japan.

Sony Corp, ranked 14th in terms of market cap on the Tokyo Stock Exchange, saw its market cap soar to 3.02 trillion yen on Wednesday, climbing above the 3 trillion yen for the first time since May 13.

Sony’s stock gained for a third consecutive day on Wednesday, advancing by 44 yen to 3,015 yen after private employers in the U.S. added employees in November.

Hirokazu Nakaima, Okinawa governor, demanded today that Prime Minister Naoto Kan renegotiate the agreement between Japan and the U.S. for relocation of air base at Futenma, when Kan visited his official residence.

The Bangladesh government is considering creation of a special economic zone for Japanese companies, visiting Prime Minister Sheikh Hasina told the Nikkei on Wednesday.

Attracted by cheap and ample labor, many Japanese companies like Fast Retailing Co have set up manufacturing operations in that country as an alternative to China, but the process has not fast tracked since the South Asian country lacks industrial areas with appropriate infrastructure.

Fuji Xerox expects to double its revenue in China by 2013 as it expands its distribution channel and unveils new products aimed at small and medium enterprises, the Japanese company said on Wednesday.

“China has become our most important and rapidly growing market and according to our research a strong GDP growth often boosts office equipment demand,” said Masataka Jo, Fuji Xerox China’s CEO and President.

Reservation for travel to China have dropped by half for the year-end holiday season, with other destinations like Taiwan, Europe and the U.S. proving a major draw, according to data provided by travel agencies as of November end.

Stock Movers

Positive economic reports from the U.S. helped export-oriented and commodity companies gain in trade today.

Canon Inc gained 2.5% to 4,050 yen and Honda Motor Co rose 1.8% to 3,135 yen. Advantest Corp, the world’s largest maker of chip-testing equipment, rose the most since July by 5.4% to reach 1,781 yen.

Mitsubishi gained 1.3% to 2,162 yen and Mitsui &Co, which counts commodities as its largest source of profit, gained 1.2% to 1,334 yen.

Brokerages gained as rising stock prices are expected to boost trading revenue and earnings.

Nomura Holdings, Japan’s largest brokerage, added 2.7% to 491 yen while Daiwa Securities, the second-largest, gained 2.9% to 389 yen.

Yahoo Japan Corp advanced 2.1% to 31,300 after its partnership with Google Inc was approved by Japan’s Fair Trade Commission.