Stocks in Japan Rebound on Manufacturing Recovery Hopes

Nigel Thomas
28 Jun, 2011
New York City

Japanese stocks rebounded after investors focused on domestic events. The makers of steel, autos and electronics rose on the expectations of quicker than estimated recovery in manufacturing. Department sales decline slowed from a year ago in May and lifted stocks of retailers.

[R]4:30 PM Tokyo – Japanese stocks rebounded after investors focused on domestic events. The makers of steel, autos and electronics rose on the expectations of quicker than estimated recovery in manufacturing. Department sales decline slowed from a year ago in May and lifted stocks of retailers.[/R]

The benchmark index inched higher in a cautious trading as crude oil declined and investors focused on domestic events. Investors are increasingly focusing on the pace of recovery after the triple disaster in March.

Steelmakers, retailers and auto and electronics makers rose as companies cited quicker pace of recovery and issued higher than expected sales or earnings outlook in the last two weeks.

Investors tiptoed in the market as Greece faces a 2-day strike as lawmakers debate austerity measures conditions.

In overnight trading, U.S. and European markets closed higher on the optimism that Greece will pass the latest demands from the European Union and the IMF to access the latest tranche of bailout funds.

The Nikkei 225 Stock Average increased 0.7% to 9,848.98 and the broader Topix index added 0.6% to 830.34.

Tokyo trading volume rose to 1.7 billion shares from 1.63 billion shares in the previous session. Advancer led decliners by 2 to 1.

The yen eased to 80.50 from 80.10 against one dollar and to 115.77 from 114.90 against one euro.

Stock Movers

Tokyo Steel increased 4% to 829 yen as steelmakers and automakers advanced. Nippon Steel increased 2% to 253 yen after the company agreed to 15% price increase with Nissan Motor in the six months to September, according to Nikkei newspaper.

Electronics exporters gained on the prospect of stability in the euro-zone as French banks express willingness to rollover 70% of Greek debt to a longer maturity of 30 years.

Fanuc increased 2.6% to 12,960 yen and Sony Corp added 0.3% to 2,038 yen.

Office equipment makers gained on media reports that the European Union will lower tariffs on printers and copiers with scanners and faxing capabilities.

Richo increased 1.2% to 867 yen and Seiko Epson increased 0.6% to 1,368 yen. Canon Inc declined 0.7%.

Department stores sales decline eased in May. The sales from a year ago fell in the month 1.3% after falling 4.8% in April and 8.3% in March, according to Trade Ministry in Tokyo.

Takashimaya Co. extended gains for the second day by 2.1% to 547 yen after it revised outlook. J. Front Retailing Co. increased 4.5% to 350 yen and Isetan Mitsukoshi Holdings Ltd added 2.5% to 767 yen.