Japan

Chandrasekhar Atreya
27 Dec, 2010
New York City

Tokyo

[R]5:00 PM Tokyo, Japan – Tokyo’s key benchmark index climbs 0.75% in a rudderless market. Japan’s Cabinet approved a record 92.41 trillion yen budget for fiscal 2011 that relies on record bond offering. Shipments of home appliances and housing starts rise in November. Corporate services price index drops in November.[/R]

Tokyo stocks moved without direction in a mixed trade to end higher on a late rally. Cabinet approved a revised budget that relies on a record bond offering that will exceed tax revenues for the second year in a row.

The benchmark Nikkei 225 Stock Average ended the day at 10,355.99, up 0.75% or 76.80 and 163 members closed higher. The broader Topix Index gained 0.3% to 904.68.

The yen closed at 82.80 yen to a dollar and 108.87 yen to a euro in Tokyo today.

The fiscal year 2011 draft budget approved by the Cabinet on Friday relies on bonds as its largest revenue source. The draft budget of record 92.41 trillion yen is an increase of 112.4 billion yen from the initial budget.

Tax revenue is estimated at 40.92 trillion yen, up 3.53 trillion yen, and issuance of new government bonds will remain at high levels reaching 44.29 trillion yen and exceeds tax revenue for the second year in a row.

The government plans to issue bonds of 169.59 trillion yen in various maturities next year, beating the previous record issued in 2005 by about 90 billion yen. Accordingly to the issuance plan released on Friday by the Finance Ministry, a rough 8 trillion yen increase in roll-over bonds is expected to drive the bond offering.

Nominal GDP per capita was 3.71 million yen in fiscal year 2009, down 3.6% from a year ago period, according to data released by the Cabinet office on Friday.

Japan’s corporate services price index fell to 96.6 in November, down 1.1% from a year ago period and for the 26th month of decline in a row, the Bank of Japan said today.

The minutes of the meeting of the October 28 meeting of the Bank of Japan that was released today showed that some members had considered the possibility of expanding the central bank’s asset buying program.

Housing starts rose 6.8% in November from a year ago to 72,838 units, for the sixth monthly increase in a row, the Land Ministry said today.

Starts of owner-occupied homes increased 7.1% to 27,235 unit and rental properties declined 9.5% to 26,703 units. Starts of condominiums and houses built for sale surged 46.3% to 18,549 units, up for the ninth month in a row.

Local shipments of home appliances rose 29.8% in November from a year ago period to 208.3 billion yen, for the sixth month of expansion in a row, the Japan Electrical Manufacturers Association said today in Tokyo.

Local shipments rose on the lowered taxes on air-conditioners before the government’s eco-point program was scaled down in December. Shipments of air-conditioners surged 81.9% to 51.9 billion yen and sales of refrigerators soared 59% to 43.6 billion yen.

Stock Movers

Elpida Memory Inc, maker of computer memory chips, rose 1.6% to 942 yen, after Kyodo News Agency reported that the company is in discussion with Taiwanese chip makers for business expansion.

Dai Nippon Printing Co, a provider of printing services, rallied 1.79% to 1,122 yen.

Hitachi Ltd and Canon Inc both gained after Nikkei newspaper reported Taiwan’s Hon Hai Precision Industry Co plans to acquire control of liquid crystal display ventures with companies for 100 billion yen. Canon rose 0.9% to 4,310 yen and Hitachi rose 0.7% to 411 yen.

Fanuc gained 1.46% to 12,500 yen while TDK Corp added 1.78% to 5,730 yen. Komatsu Ltd also gained 0.73% to 2,486 yen.

Inpex Corp gained 0.82% to close at 490,500 yen.