Utilities in Tokyo Rebound; Fast Retailing Lifts Profit View

Nigel Thomas
07 Apr, 2011
New York City

Foreign investors in Japan were net buyers of stocks and bonds in Japan. The benchmark index in Tokyo soared as much as 1.1% but surrendered most of the gains at close. The Bank of Japan left its bond and credit program unchanged and left target interest rate range unchanged.

[R]5:00 PM Tokyo – Foreign investors in Japan were net buyers of stocks and bonds in Japan. The benchmark index in Tokyo soared as much as 1.1% but surrendered most of the gains at close. The Bank of Japan left its bond and credit program unchanged and left target interest rate range unchanged.[/R]

Stocks in Japan traded higher after the central bank left its benchmark rate unchanged and kept bond purchase program and credit program on hold. Stocks of utilities were also higher after a relief rally.

The Nikkei 225 Stock Average increased 6.56 to close at 9,590.93 and the broader Topix index added 0.2% to 841.10. The indexes surrendered most of the gains after the Nikkei index gained as much as 1.1% in the session.

The yen traded at 85.53 to a dollar and at 122.55 to one euro.

Domestic investors in Japan sold a net of 1,174 trillion yen in foreign bonds and notes in the week ended April 2 and sold a net 23.8 billion yen in foreign stocks last week according to the latest data released by the Ministry of Finance.

Foreign investors added 144.7 billion yen of net stocks last week and also bought a net 109.3 billion yen in Japanese bonds and notes.

The Bank of Japan left its interest rate between zero and 0.1% and kept its asset purchase program at 10 trillion yen and stimulus of 30 trillion yen unchanged.

The central bank also offered 1 trillion yen in one-year of additional loans to pump more cash in the banking system after the earth quake.

Stock Movers

Fast Retailing declined 0.1% to 11,130 yen ahead of its earnings release after the close today.

After the close the operator of Uniqlo said revenues declined 2.9% to 457.33 billion yen and net dropped to 41.67 billion yen from 55.36 bilion yen in the six months period ending in February.

The company lifted its operating profit outlook to 121.5 billion yen from 113.5 billion yen and cut revenues estimate to 836 billion yen from 846 billion yen in the full year.

Banks in the early morning rallied and held some of the gains by close. Sumitomo Mitsui Financial Group Inc increased 0.2% to 2,500 yen, Mizuho Financial Group Inc added 1.5% to 130 yen and Mitsubishi UFJ gained 2.4% to 381 yen.

Automakers gained. Toyota Motor increased 0.9% to 3,295 yen and Honda Motor Co. added 1.1% to 2,927 yen. Nissan Motor Co. advanced 1.1% to 720 yen.

Electric utilities closed higher after a relief rally lifted stocks in the sector. Tokyo Electric Power increased 0.9% to 340 yen after engineers pumped nitrogen at the troubled nuclear reactor at Fukushima Daiichi plant to prevent the build up of explosive gases.

Chubu Electric Power added more than 4% and Kansai Electric Power increased nearly 3%. Both stocks had dropped more than 15% since March 11 earth quake and Tepco has declined more than 83%.

Elpida Memory increased more than 3% to 1,097 yen after the company said it will soon release 4-gigabit DRAM chip for smart phones. Samsung is the only other maker of high density memory chips for advanced phones.