Nikkei Down 0.7%; Japan Demands Bank Loans Forgiveness for Tepco

Nigel Thomas
13 May, 2011
New York City

Stocks in Japan plunged as much as 1.7% after government

[R]4:00 PM Tokyo – Stocks in Japan plunged as much as 1.7% after government’s spokesperson said taxpayers’ funds can not be made available to Tepco to compensate victims unless banks are willing to waive debts to Tepco. In earnings news, Nissan quarterly net rose 7.2% and Nikon estimated 54% jump in current year earnings.[/R]

The market indexes and bank stocks were under pressure after Chief Cabinet Secretary Yukio Edano comments. Stocks declined to a two-week low in heavy trading after the government approved a plan to help Tepco.

The Nikkei 225 Stock Average declined 0.7% to 9,648.77 and broader Topix index declined 1.1% to 839.94.

Edano comments dragged the benchmark Nikkei down to 1.7% or 9,552 but recovered from the market low.

Trading volume picked up to 2.8 billion shares from the weekly average of 2 billion shares on the main board on the Tokyo Stock Exchange.

The Japanese yen traded at 114.55 to one euro and fetched 80.77 to a dollar.

Edano at a press conference suggested that taxpayers’ funds can not be made available to compensate victims of Tepco controlled Fukushima Daiichi nuclear power plant unless banks are willing to waive debts to the electric utility.

In addition, the government approved a plan to help Tepco to compensate the victims of nuclear crisis and also said that other utilities will be required to make annual payment to fund the victims’ compensation.

Stock Movers

Banks declined after government urged banks to forgive loans to the utility company Tepco. Sumitomo Mitsui Financial Group dropped 4.1% and Mitsubishi UFJ Group declined 3.3%. Mizuho Financial Group fell 3%.

Commodities linked stocks declined. Inpex dropped 3.9% to 541,000 yen and JX Holdings fell 1.7% to 528 yen.

Sumitomo Metal Mining plunged 3.1% to 1,310 yen as copper and base metal prices traded volatile in Shanghai and London markets.

Nikon gained 6.5% to 1,768 yen after the camera maker estimated current year net profit to increase 54% to 42 billion yen on sustained demand for digital cameras.

Nissan Motor increased 3.5% to 823 yen after the automaker reported quarterly operating profit increased 7.2% and said global production is expected to return to normal level by October.

Toyota Motor Corp added 0.9% to 3,400 yen, Hitachi Ltd dropped 1.1% to 457 yen and Komatsu Ltd decreased 0.8% to 2,699 yen.

Honda Motor increased 1.5% to 3,145 yen, Yamada Denki Co soared 8.85% to 6,280 and Japan Tobacco Inc rose 3.3% to 326,500 yen.