Japan Exports Rise 9.1%; Bank of Japan Purchases 250 Trillion Yen Bonds

Chandrasekhar Atreya
22 Dec, 2010
New York City

Tokyo stocks edged lower after hitting a fresh 7-month high intra day as investors booked profits for the weekend. Bank of Japan confirmed 25 trillion yen bonds and assets purchase. Exports surge 9% in November.

[R]5:00 PM Tokyo, Japan – Tokyo stocks edged lower after hitting a fresh 7-month high intra day as investors booked profits for the weekend. Bank of Japan confirmed 25 trillion yen bonds and assets purchase. Exports surge 9% in November.[/R]

The Nikkei index moving in a narrow range edged lower today on profit taking after hitting a fresh 7-month high intra-day. Investors were cautious ahead of the long weekend to celebrate Emperor’s Birthday.

The Nikkei 225 Stock Average declined 24.05 or 0.23% down to 10,346.48. The broader Topix shed 0.1% to 905.78.

The yen was weaker against both the dollar and the euro and closed at 83.70 to a U.S. dollar and at 110.01 to a euro.

The Bank of Japan confirmed today that it bought 24.99 trillion yen worth of government bonds, corporate bonds and other assets on Monday under it Asset Purchase program launched in October.

Exports from Japan rose in November for the 12 month in a row due to higher demand for iron products, the government said today.

Shipments in November rose 9.1% from a year earlier to 5.441 trillion yen, with exports to China rose 18.3%, to all Asian nations increased 13% and to the U.S gained 1.2%, the Ministry of Finance said today.

Overall imports rose 14.2% to 5.2783 trillion yen and the trade surplus fell 55.4% till November to 162.8 billion yen.

Shipments of consumer electronics surged 67.4% in November from a year ago month, to 505.8 billion yen, recording the 16th month in a row of rise, the Japan Electronics and Information Technology Industries Association said today.

Sumitomo Trust and Banking Co and Chuo Mitsui Trust Holdings Inc held extraordinary board meetings today to consider the merger proposal of setting up a holding co named Mitsui Sumitomo Trust Holdings by April to combine bank operations.

The approved proposal will issue new shares to current shareholders 1-to-1 ratio and to Chuo Mitsui shareholders 1.49 shares per share of Sumitomo Trust shareholders.

The Bank of Japan announced on Tuesday that it will extend its U.S. dollar swap agreement with the Federal Reserve and continue the dollar fund supplying operations that were set to expire at the end of January 2011.

The swap agreement will be extended till August 1, 2011 and follows similar moves by Bank of England and European Central Bank.

The government said Tuesday that it expects the country’s economy to expand 1.5% in fiscal year 2011 on a real basis. The forecast assumes support from overseas recovery with consumer prices remaining flat.

The Tokyo Stock Exchange said today it will speed up the screening process from March 2011, the new companies that want to be listed on the small-cap market, in its effort to spur growth in start-up firms in Japan.

“These listing measures are aimed at revitalizing the market,” said Atsushi Saito, TSE Head, at a news conference on Tuesday.

Stock Movers

Chuo Mitsui Trust and Sumitomo Trust & Banking Co both gained after announcing their merger plans. Chuo Mitsui Trust gained 1.47% or 5 yen to close at 344 yen and Sumitomo Trust increased 1.75% to close at 523 yen.

Canon Inc gained 1.9% after the Nikkei business daily said the camera maker is likely to beat its operating profit forecast for the year ending this month on strong demand for high-end cameras.

Taiheiyo Cement lost 2.59% to close at 113 yen, while Nippon Steel sank 0.33% to 298 yen. Hitachi Ltd lost 0.24% to close at 411 yen and Isuzu Motors dipped 1.31% to 378 yen.

Trading houses and other resource-related companies posted strong gains after crude futures rose above $90 per barrel in New York.

Marubeni Corp rose 0.87% to 577 yen and second-largest trading house Mitsui & Co gained 0.68% to 1,325 yen.