Nikkei in 5-Day Rally; Prime Minister Kan Plans Cabinet Reshuffle

Chandrasekhar Atreya
13 Jan, 2011
New York City

Japanese stocks rally for the fifth day in a row led by bankers and closed at 8-month high. The Nikkei index is up 16% in the last three months. Prime Minister Naoto Kan plans to reshuffle his cabinet on Friday. Machinery orders fall for the third month in a row in November.

[R]5:00 PM Tokyo, Japan – Japanese stocks rally for the fifth day in a row led by bankers and closed at 8-month high. The Nikkei index is up 16% in the last three months. Prime Minister Naoto Kan plans to reshuffle his cabinet on Friday. Machinery orders fall for the third month in a row in November.[/R]

The benchmark Tokyo index rose to a new eight-month high again after a successful bond auction in Portugal eased the euro zone fears. Resource linked companies also gained after a surge in commodities prices. Machinery orders fell 3%.

The Nikkei 225 Stock Average rose 0.73% or 76.96 to close at 10,589.76 and the yen ended the day at 83.11 yen to a dollar and 109.10 yen to a euro in Tokyo.

Machinery orders, seasonally adjusted, fell 3% from October to 723 billion yen in November, the third month in a row of declines, the Cabinet Office said today.

Orders from the manufacturing sector rose 10.6%, while those from the non-manufacturing sector dropped 10.5% and the government revised its overall assessment saying that orders are on a recovery track.

Total liabilities at companies the declared insolvency with debts of at least 10 million yen increased 3.3% in 2010 from a year ago to 7.16 trillion yen, according to data released by Tokyo Shoko Research Ltd today.

Four companies that went under, including Japan Airlines Corp, Incubator Bank of Japan, Takefuji Corp and four others, with debts of more than 100 billion yen each last year, accounted for nearly half the total.

The World Bank said Wednesday it expects the global economy to expand 3.3% in 2011 in terms of real gross domestic product, unchanged from its June 2010 estimate.

Prime Minister Naoto Kan has decided to reshuffle the cabinet and the ruling Democratic Party of Japan’s leadership on Friday ahead of the start of the next Diet session on January 24.

Kan had a meeting with Chief Cabinet Secretary Yoshito Sengoku, DPJ Secretary General Katsuya Okada, DPJ Deputy Secretary General Yukio Edano and others on Wednesday to discuss plans for the personnel changes and the Diet schedule.

The volume of cargo handled by the new Haneda airport in Tokyo has been increasing sharply since the domestic hub opened for international passenger service at the end of October.

Cargo volumes reached 11,361 tons in November and 12,457 tons in December, making the total volume handled in 2010 surge 240% from a year ago to 52,086 tons, according to Tokyo Customs data.

Shimadzu Corp, which leads the analytical and measuring equipment market in China, said Wednesday that it will start designing analytical and measuring instruments for the Chinese market locally.

The company plans to set up a development site at a Shanghai unit this month spending about 300 million yen and will hire 30 people to work at this facility, including Chinese researchers.

Toshiba Corp said Wednesday it has received an order for supply of thermal power generation equipment to India’s Essar Group for more than 10 billion yen.

Toshiba will supply two 660 megawatt supercritical steam turbines starting in 2012, and the first unit is expected to start operating in 2013.

Stock Movers

Toshiba Corp gained 0.83% to 486 yen after it received an order from India’s Essar Group for thermal power equipment.

Toyota Motor Corp rose 1% to 3,535 and Nissan Motor Corp added 0.59% to 858 yen.

Chuo Mitsui Trust surged 5.04% to 354 yen while Fukuoka Financials added 1.65% to 370 yen. Mizuho Financial jumped 2.38% to 172 yen.

Fast Retaining fell 1.22% to 12,120 yen while Bridgestone Corp dropped 3.41% to 1,615 yen.