Nikkei in Tokyo Soars 2% on Manufacturing Oulook

Nigel Thomas
31 May, 2011
New York City

Stock in Japan surged after a survey of manufacturers indicated production to increase to pre-quake level in June. The news lifted the benchmark index 2% and industrial companies led the advance. Euro-zone linked stocks also rose after Greek debt worries eased.

[R]4:30 PM Tokyo – Stock in Japan surged after a survey of manufacturers indicated production to increase to pre-quake level in June. The news lifted the benchmark index 2% and industrial companies led the advance. Euro-zone linked stocks also rose after Greek debt worries eased.[/R]

The Nikkei 225 Stock Average increased 1.99% to 9,693.73 and the broader Topix index gained 1.85 to 838.48.

The yen traded at 117.58 to one euro and near 80.85 to one dollar.

Industrial output increased 1% in April and is expected to surge to 8% in May and expand further 7.7% in June.

The survey of Japanese manufacturers conducted by the Trade Ministry showed that industrial out is expected to surge in June to the level near the production in February, before the March 11 earthquake.

Moody’s Investors Service placed Japan’s debt rating on watch with a negative outlook on the worries that government may not be able to cut the debt burden.

The rating agency did not shed any new light to the Japan’s current plight and its action was largely ignored by the market.

Moody’s and Standard & Poor’s have come under pressure by international analysts for their lack of objective analysis and treating the U.S. government debt with optimistic views and the Asian debt with negative views over the last one decade.

Stock Movers

Euro-linked stocks closed higher on the prospect of a Greek debt resolution.

Sony Corp increased 1.9% to 2,163 yen and said it plans to reactivate its PlayStation Network around the world except in South Korea, Japan and Hong Kong.

Mazda added 1.5% to 205 yen.

Tokyo Electric Power fell 2.8% to 317 yen and Standard & Poor’s lowered its debt rating to junk status and said it is increasingly likely that banks may restructure some of its debt. S&P rating action was widely overlooked by the market and viewed too late and too little.

Fanuc increased 1.8% to 12,490 yen and Mitsubishi Heavy Industries Ltd soared 4.8% to 394 yen.