Yen Strengthens, Nikkei Jumps 1.2%, Mitsubishi UFJ Up

Nigel Thomas
22 Jul, 2011
New York City

Stocks in Tokyo gained after global sentiment improved for the second day. Banks led the advance in the region after the euro-zone ministers hammered out an agreement to offer new loans with relaxed conditions to Greece. The yen dropped below 79 to a dollar, the strongest since March 17.

[R]4:30 PM Tokyo – Stocks in Tokyo gained after global sentiment improved for the second day. Banks led the advance in Tokyo and in the region after the euro-zone ministers hammered out an agreement to offer new loans with relaxed conditions to Greece. The yen dropped below 79 to a dollar.[/R]

Stocks in Tokyo opened higher on the improving sentiment in the global markets after the euro-zone ministers struck an agreement to offer new loans and permitted the 440 billion euro rescue fund to purchase sovereign bonds in the regions.

The Nikkei 225 Stock Average increased 1.2% to 10,132.11 and the broader Topix index gained 1% to 868.81.

For the week, the Nikkei added 1.6% and the Topix gained 1.1%.

The yen edged higher to 78.30 from 79.60 after the euro-zone ministers agreed to offer news loans to Greece for an extended length at a reduced interest rate.

Stock Movers

Banks traded higher after the euro-zone ministers and regulators gave powers to the rescue fund to purchase sovereign debt trading in the region. In additions the ministers approved 159 billion euros of news loans with longer maturities and cheaper interest rates to Greece.

Sumitomo Financial Group increased 3.6% to 2,530 yen and Mitsubishi UFJ Financial Group Inc added 3.3% to 407 yen.

Mitsubishi UFJ net was estimated at 400 billion yen after a one-time premium of 200 billion yen paid by Morgan Stanley to convert its preferred stock to common stock, according to a report in the business daily Nikkei. Mitsubishi UFJ controls 22% of Morgan Stanley.

Morgan Stanley reported better than expected earnings last night in New York.

Exporters and the euro-zone linked stocks led the gainers in the session today. Canon Inc increased 1.3% to 3,786 and Sony Corp added 1.1% to 2,100. Nikon increased 1.1% to 1,852 yen.

Automakers added. Toyota Motor Corp increased 0.8% to 3,335 yen and Honda Motor added 70 yen or 2.2% to 3,235 yen. Nissan Motor Co. Ltd increased 14 yen or 1.6% to 861 yen.

Nippon Shokubai Co, the maker of special chemicals increased 1.4% to 1,061 yen after the Nikkei estimated first half operating earnings increase of 20%.