Stocks in Japan Meander; Weaker Yen

Chandrasekhar Atreya
15 Dec, 2010
New York City

Tokyo stocks moved in a narrow range as investors focused on weaker yen and stronger than expected U.S. retail sales. Business confidence slips for the first time after seven quarters. Eco-point applications for purchase of energy-efficient appliances surge 40% in November.

[R]5:00 PM Tokyo, Japan – Tokyo stocks moved in a narrow range as investors focused on weaker yen and stronger than expected U.S. retail sales. Business confidence slips for the first time after seven quarters in the quarter to December. Eco-point applications for purchase of energy-efficient appliances surge 40% in November.[/R]

Tokyo stocks moved in a narrow range after better-than-expected retail sales in the U.S and a weaker yen countered investor concerns on the weak outlook for the domestic economy.

The Nikkei 225 Stock Average dropped 0.07% or 6.99 to close at 10,309.78. The broader Topix rose 0.1% to close at 902.42 after changing directions several times during the day.

The yen weakened to 83.87 against the dollar today after closing at 83.46 in Tokyo yesterday.

Japanese business confidence in the three months to December fell, according to the latest quarterly business sentiment survey of Japan released today, the first drop in seven quarters, albeit it was at a slower-than-expected pace.

The headline diffusion index of sentiment among large manufacturers dropped to five, from the eight recorded in the previous survey in September. Business sentiment down the road is expected to worsen further, according to the survey.

The survey also showed that the planned capital spending by big companies in all sectors for fiscal year 2010 rose 2.9% from a year ago.

A panel of the Transport Ministry selected a route today that will have the new maglev line planned by Central Japan Railway Co to pass through Southern Alps, linking Nagoya and Osaka with Tokyo.

The panel favored the more direct route over the other two alternatives in its interim report.

Otsuka Holdings Co, which issued 80 million shares through a public offering along with 14.5 million shares through a secondary sale and over allotment, listed on the Tokyo Stock Exchange today and opened at 2,170 yen, 3.3% above its IPO price of 2,100 yen.

A key gauge of business sentiment at small and medium sized businesses worsened for the second quarter in a row, driven by the end of subsidies for fuel-efficient cars, the Ministry of Economy, Trade and Industry said in its report on Tuesday.

The diffusion index slipped to minus 22.3 in the quarter to December, down 1.2 points from the previous quarter’s survey.

The number of eco-point applications for purchases of energy-efficient appliances was 3.43 million in November, rising nearly 40% from October, according to data from the three government ministries overseeing the reward program.

A total of 46.6 billion yen worth of reward points were allowed, which was also higher by nearly 40%. Both these figures were the highest on a monthly sales basis since the program was launched in July.

More condominiums were put up for sale in Tokyo for the first 11 months of 2010 than in all of 2009, according to an industry report released on Tuesday.

A total of 37,147 such units were available in the Tokyo area between January and November, exceeding the total of 36,376 in all of 2009, the Real Estate Economic Institute reported.

Hitachi Ltd said on Tuesday it will construct a joint venture plant in the city of Changchun in Jilin Province, China, to increase production of electrical equipment for high-speed trains.

The company will invest about 1.05 trillion yen to boost output in response to China’s plan to manufacture more rolling stock for high-speed trains.

Stock Movers

A weaker yen helped Toyota Motor Corp to add 0.92% to close at 3,290 yen. Canon Inc gained 0.37% to close at 4,095 yen.

Mitsubishi Estate Co climbed 0.41% to 1,458 yen after the Bank of Japan said on Tuesday it will start investing in real estate investment trusts.

Otsuka Holdings Inc, a Japanese drug maker, added 2% on its first day of trading to close at 2,140 yen.

JFE Holdings Inc, Japan’s second-largest steel maker, slipped 1.21% to 2,866 yen after the central bank’s tankan survey for December showed a dip in business confidence.