Nikkei in Tokyo Trades Higher Yen Scales Up

Nigel Thomas
26 Jul, 2011
New York City

Stocks in Japan rebounded on the hopes of better than expected earnings. Canon and Kao revised earnings estimates higher. Metals and resources linked companies gained as gold and oil trade near recent highs.

[R]4:00 PM Tokyo – Stocks in Japan rebounded on the hopes of better than expected earnings. Canon and Kao revised earnings estimates higher. Metals and resources linked companies gained as gold and oil trade near recent highs.[/R]

Stocks in Japan increased following a rebound in Asia wide trading. The debt impasse talks reached a new level of urgency and added an air of uncertainty as U.S. lawmakers remain further than earlier expected.

President Barack Obama in a televised address to the nation urged lawmakers of both parties to finalize the debt talks as the nation flirts with the August 2 deadline before the federal government runs out of money.

Republican controlled U.S. House has been adamant and looking for spending cuts in the medical assistance and social security but prefers to preserve the wasteful military spending and agriculture subsidies.

The Nikkei 225 Stock Average increased 0.5% to 10,097.72 and the broader Topix index added 0.5% to 866.20.

The yen eased to 77.83 from 78.10 against one dollar and to 111.95 from 112.35 against one euro.

Stock Movers

Industrials and capital equipment makers increased on the expectations of higher profits.

Canon added 2.5% to 3,884 yen after it estimated full year earnings to increase to 260 billion yen or $3.3 billion.

Kao Corp increased 4.7% to 2,262 yen after the household goods maker cited rising sales in Asia and lifted net income view by 7.5% to 57 billion yen in the current fiscal year.

Jiji Press report suggested that Japan’s Fair Trade Commission may investigate bearings maker for price fixing.

NTN Corp decreased 3.9% to 467 yen and NSK dropped 3.6% to 775 yen and Jtek fell 2.9% to 1,193 yen.

Tokyo Electric Power Co. decreased 4.2% to 513 yen after it fell as much as 9% in the day. Chubu Electric Power Co dropped 1.1% to 1,420 yen and Tohoku Electric Power Co. decreased 1.3% to 1,069 yen.

Tepco shares dropped for the secnd day in a row on the speculation that the government will enact a compensation scheme for the nuclear disaster victims as early as next week. The stock declined on the profit taking.

In addition, a Nikkei report suggested that total fuel costs at five largest utilities is expected to 2 trillion yen in the current fiscal year.

Metals and mining related companies rebounded for the second day after gold touched a record high in New York trading to $1,626.30 an ounce.

Sumitomo Metal Mining Co added 1.6% to 1,394 yen and Mitsubishi Materials Corp added 1.5% to 262 yen.