Nikkei in 6-day Rally; Positive Regional Economic Survey

Nigel Thomas
05 Jul, 2011
New York City

Stocks in Japan closed higher for the sixth day in a row prompting worries that market rally may not be supported by fundamentals. The latest spurt was driven by the mildly optimistic regional economic survey released by the Bank of Japan.

[R]4:00 PM Tokyo – Stocks in Japan closed higher for the sixth day in a row prompting worries that market rally may not be supported by fundamentals. The latest spurt was driven by the mildly optimistic regional economic survey released by the Bank of Japan.[/R]

Stocks in Japan closed higher for the sixth day in a row on a slowing momentum. The latest surge stoked worries that indexes may be ahead of fundamentals and may trend lower in the next few weeks.

The latest positive market sentiment was driven by the mildly optimistic outlook in the regional economic survey conducted by the Bank of Japan. The so called Sakura Report indicated improving economic conditions and activities in the seven of the nine regions in the country.

Tohoku, the northern region in Japan, hit hardest with the March 11 earthquake also showed improvements in economic activities.

The Nikkei 225 Stock Average increased 0.1% to 9,972.46 and the index gained 4% in the last five sessions and traded above 10,000 for the first time in two months. The broader Topix index added 0.1% to 865.18. The Topix index extended the gains for the sixth day in a row.

Tokyo Stock Exchange first section trading volume decreased to 1.82 billion shares from 1.88 billion shares on Monday. Decliners led advancers by 824 to 669.

The yen added to 80.70 from 80.90 against one dollar and to 116.95 from 117.25 against one euro.

Stock Movers

Osaka Stocks Exchange gained 8% to 390,000 yen on the report in Asahi newspaper that the company received a merger proposal from Tokyo Stock Exchange. The OSE is expected to reject the unsolicited merger talks.

Uniden Corp increased 8.1% on a speculation from an analyst at Bank of Merrill Lynch set the target price of 430 yen and estimated 10% operating margin at its home appliance business.

Fast Retailing decreased 1.7% after it reported lower than expected increase in store sales in June.

Askul, the online retailer dropped 8.3% to 1,267 yen after it reported a net loss of 1 billion yen in the fiscal year ending in May on the account of one time charges related to earthquake linked losses to inventory and warehouse.

Tokyo Electric increased 5.1% to 413 yen after the nuclear power utility installed a self-contained cooling system at three Fukushima Dai-Ichi reactors. The new system will cut the release of radioactive water.