Nikkei at 8-month High; Steel Exports Surge 10% in November

Chandrasekhar Atreya
06 Jan, 2011
New York City

Tokyo stocks climbed higher and the Nikkei index rose to a eight-month high. Toyota Motor

[R]5:00 PM Tokyo, Japan – Tokyo stocks climbed higher and the Nikkei index rose to a eight-month high. Toyota Motor’s car sale in China surpasses its target of 2010. Current account deposits of financial institutions with the central bank reached the highest in December since the end of monetary easing in 2006.[/R]

Stocks in Tokyo started well but moved in a very narrow range to reach its eight month high after overnight rise on Wall Street following better U.S. jobs data triggered buying in a wide range of stocks.

The Nikkei 225 Stock Average gained 1.44% or 148.99 to close at 10,529.76. The broader Topix climbed 1.4% to 924.51. Both indexes closed at their highs last seen in May 2010.

Toyota Motor Corp said its Chinese sales increased to 846,000 vehicles in 2010, up 19% from a year ago, beating the target of 800,000 units forecast by the company.

Seven insurance companies filed lawsuits against Toyota Motor Corp seeking a minimum of $230,000 to cover the cost of claims paid for accidents related to unintended acceleration problems identified in the company’s vehicles in the past several years.

Toyota Motor Corp subsidiary Central Motor Co began operations today at its auto plant to make small cars in Miyagi Prefecture.

The new plant with annual capacity of 120,000 will make Yaris Sedan, known as Belta in Japan, for export. In April, the plant will start production of Corolla Axio for the local market.

Domestic sales of new automobiles are forecast to decline in 2011 after it increased in 2010 for the first time in six years due to government subsidies. The automakers will now have to shift their focus to emerging markets for growth.

Domestic sales of automobiles grew 7.5% to 4.95 million units in 2010, including mini vehicles, which is about 40% lower than the record of 7.77 million units set in 1990. The Japan Automobile Manufacturers Association predicts that domestic sale of new vehicles is estimated to fall 9.9% to 4.46 million units in 2011.

The current account deposits of financial institutions at the central bank in Japan, a measure of their cash on hand, reached their highest level in December since the end of quantitative easing in 2006.

The bank which began its fund-supplying efforts in mid-December saw the current account deposits average 19.78 trillion yen that month, up 36.6% from a year earlier to a level not seen since April 2006.

The yen portion of foreign exchange reserves held by governments and central banks all over the world surged to its highest level in five years last September, according to data compiled by IMF.

As of September 30, the yen portion was around 3.63% of all foreign reserves, up 0.32% point from a quarter earlier, marking the third quarter in a row of growth and the highest level since September 2005.

Steel exports from Japan rose 9.6% from a year ago to 3.57 million tons in November, for the first increase in two months, the Japan Iron and Steel Federation said Wednesday.

Stock Movers

Canon Inc, the camera maker, added 1.4% to 4,275 yen and Toyota Motor climbed 2.6% to 3,380 yen. Fanuc Corp, the world’s largest maker of industrial robots, surged 2.7% to 12,970, the biggest support for the Nikkei.

Nikon Corp jumped 3.5% to 1,818 yen after saying it expects operating profits from its precision-equipment operations to reach 28 billion yen, seven times the amount forecast for this year.

Mitsubishi Corp increased 1.9% to 2,373 yen while Mitsui & Co, the commodities importer rose 2.69% to 1,427 yen.

Fast Retailing Co led the decliners in the index with 5.1% drop to 12,400 yen after its Uniqlo stores in Japan reported lower sales in December for the fifth month in a row.

Resona Holdings Inc surged the most at 14% to 545 yen.