Nikkei in Japan Surges 1.6%; Kyocera, Komatsu Advance

Nigel Thomas
28 Apr, 2011
New York City

Japan stocks gained after positive earnings and recovering trading sentiment and volume. The yen traded in a tight range ahead of the Golden Week holiday period. Komatsu gained after it reported quarterly net soared nearly a third and Kyocera advanced on higher office equipment sales.

[R]4:30 PM Tokyo – Japan stocks gained after positive earnings. Bank of Japan left key lending rate on hold. The yen traded in a tight range ahead of the Golden Week holiday period. Komatsu gained after it reported quarterly net soared nearly a third and Kyocera advanced on higher office equipment sales.[/R]

Stocks in Tokyo rose after the U.S. Federal Reserve left its target interest range unchanged and said economic conditions are moderately improving and labor markets are expanding gradually. The rates are expected to remain low for the foreseeable future.

The sentiment also brightened after better than expected earnings from Kyocera and Panasonic and Komatsu.

The Nikkei 225 Stock Average soared 1.63% or 157.90 to 9,849.74 and broader Topix index gained 11.98 or 1.43% to 851.85.

The index closed at the post-quake high but still below the March 11 level of

Trading on the first section of the Tokyo Stock Exchange was 1.62 trillion yen and 2.18 billion shares changed hands. The turnover increased for the third day in a row.

The yen edged up but traded in a narrow range of 81.71 yen and 82.15 yen to a dollar. Crude oil increased 33 cents to US$113.09 a barrel.

The financial markets are closed tomorrow and will open Monday and Friday next week.

Ministry of Economy, Trade and Industry reported industrial output dropped 15.3% in March after triple disaster struck on March 11. The decline in output exceeded the last drop in production at the time of the collapse of Lehman Brothers in 2009.

The Bank of Japan left its key lending rate target between zero and 0.1% and cut its annual growth outlook in the current year to 0.6% from 1.6%. But the central bank lifted its economic growth outlook to 2.9% in the next fiscal year.

Governor Masaaki Shirakawa also rejected a proposal by one of the two deputy governors to expand the asset purchase plan. The rare division among top officials at the bank surprised the market watchers.

Stock Movers

Sony plunged 4.5% to 2,260 yen and the company shut down its online video game network after hackers stole personal and credit card data on 77 million of its members.

Kyocera gained 5.3% to 8.890 yen after the office equipment maker reported latest quarterly net surged by a third on higher than expected sales.

Komatsu Ltd increased 2.8% to 2,840 yen after the company reported a double operating quarterly profit and estimated higher profit in the current financial year.

Panasonic Corp confirmed that the company will cut additional 17,000 jobs and close up to 70 worldwide plants over the next two years. Earlier the company had indicated it will cut 18,000 jobs.

With the new job cuts Panasonic plans to trim 35,000 jobs ever three years and trim its workforce from 367,000 at the end of March to 350,000 by 2013.

The company has 350 manufacturing locations around the world and will merge several of its facilities to lower its production cost and compete with other Asian rivals.

Panasonic has set aside 110 billion yen or $1.3 billion to cover restructuring expenses in the current fiscal year.