Nikkei Rises More Than 1%; Bank of Japan Holds Rates

Chandrasekhar Atreya
25 Jan, 2011
New York City

Japanese stocks traded higher for the second day to gain the most in two weeks, led by chip stocks. Bank of Japan keeps key interest rate unchanged. Restaurant sales and domestic shipments of white goods rose in 2010 for the first time in two years.

[R]5:00 PM Tokyo, Japan – Japanese stocks traded higher for the second day to gain the most in two weeks, led by chip stocks. Bank of Japan keeps key interest rate unchanged. Restaurant sales and domestic shipments of white goods rose in 2010 for the first time in two years.[/R]

Stocks in Tokyo gained pushing the benchmark index by the most in two-weeks on increased earning expectations and a sustained gain in chip stocks.

The Nikkei 225 Stock Average rose 1.15% or 119.31 to close at 10,464.42 and the broader Topix gained 1.3% to close at 929.28. Both the gauges rose the most since January 6.

The yen closed the day at 82.44 yen to a dollar and 112.42 yen to a euro in Tokyo.

Japan’s central bank kept its key rate unchanged between zero and 0.1% and raised its growth assessment for the fiscal year ending in March 2011 to 3.3% from an earlier forecast of 2.1%.

The Bank of Japan also raised its estimate for the consumer price index for the fiscal year from the increase of 0.1% forecast in October to a 0.3% increase, based on its midterm review of the outlook for economic activity.

Restaurant sales in the year 2010 rose 0.5% from a year ago, for the first such increase in two years, the Japan Foodservice Association said today.

The association said in its report that while sales per customer slipped 2.1%, the number of customers grew 2.6% pushing up overall sales. Sales at fast food restaurants rose 2.1% for the seventh year of increase in a row as customers preferred bargains.

Matsui Securities Co said today that its group net profit declined 21% for the period of nine months to December to 4.5 billion yen as compared to a year ago period, with total trading volume among retail investors staying the same while brokerage earned smaller fees.

The company said it will pay a year-end dividend of 15 yen per share for the year ending March 2011, the same as last year.

Shipments of PC units in Japan totaled 1.02 million in December, up 0.8% from a year ago month, the Japan Electronics and Information Technology Industries Association said today.

Shipments of desktop PCs rose 2.8% to 275,000 units while those of laptops rose 0.1% to 754,000 units.

Nissan Motor Co is on track to produce 10,000 Leaf electric cars by the end of this year till March, at a plant in Japan, according to a company executive.

“We initially planned to produce 10,000 this fiscal year and we can meet that target by the end of March,” said Toshiharu Sakai, a Nissan Senior Vice President, at a briefing at a plant in Yokosuka, Kanagawa Prefecture near Tokyo where the Leaf cars are built.

Osaka Securities Exchange Co said today that it will push the closing time for after-hours stock trading of Nikkei Stock Average futures and other derivatives from the current 11:30 p.m. to 3 a.m.

Domestic shipments of white goods in 2010 rose 11.9 in 2010 to 2.21 trillion yen from a year ago, for the first such growth in two years, the Japan Electrical Manufacturer’s Associations said today.

Shipments of air-conditioners and refrigerators surged considerably due to high summer temperatures and to a surge in purchases before the scaling down of the government’s eco-point program for purchases of environmentally friendly home appliances.

Stock Movers

Mitsubishi UFJ Financial Group Inc, the largest bank of Japan by market value, surged 2.9% to 454 yen. Sumitomo Mitsui Financial Group Inc rose 1.4% to 2,934 yen.

Sony Corp added 2.3% to 2,919 yen. Fanuc Corp gained 2.4% to close at 12,620 yen.

Nikon Corp, a supplier of parts used in chip making, rose 4% to 1,946 yen after U.S. and European chip makers posted higher earnings.

Resona Holdings slumped 5.1% to 443 yen after saying it will raise as much as 544.8 billion yen in a share sale.

Dainippon Screen Manufacturing Co surged 4.4% to 734 yen after the Nikkei Newspaper said it received more orders for semiconductor supplies in the December quarter.