Nikkei in Tokyo Rises 1%; Yen Firms

Nigel Thomas
10 Aug, 2011
New York City

Stocks in Japan traded higher after the U.S. Federal Reserve left its key lending rate near zero and guided low rates for another two years. Exports linked stocks were lower as the yen firmed up. Sony confirmed that rioters burned down one of its warehouses in London.

[R]4:30 PM Tokyo – Stocks in Japan traded higher after the U.S. Federal Reserve left its key lending rate near zero and guided low rates for another two years. Exports linked stocks were lower as the yen firmed up. Sony confirmed that rioters burned down one of its warehouses in London.[/R]

The Nikkei index rebounded after a three-day of sell off that dragged the market index near the lows last seen on March 15.

The markets in Asian and in Japan closed higher after the Fed left its key rate on hold near zero and guided lower rates till the mid-2013.

However, Fed also indicated that the downside risks to the economy remain and unemployment will come down gradually from 9.1%.

Earlier in the week, Tokyo stocks extended losses for the third day in a row and the benchmark index flirted with the 8,600 lows last seen on March 15.

The yen rose as high as 76.80 from 77.10 in volatile trading and traded against one euro at 110.01 from 110.34 at yesterday’s close.

The Nikkei 225 Stock Average rose 1.05% or 94.26 to 9,038.78 and the broader Topix index gained 6.34 or 0.8% to 776.73.

The Nikkei index had declined 7.4% in the three days of losses.

The Nikkei is down 17.5% from its peak on February 21 and dropped 10% in the year but still above its March 15 low of 8,605.15.

Trading volume fell to 2.2 billion stocks above the last week average of 2 billion shares and below the record volume of 3.3 billion shares in the last four months.

Stock Movers

Financials declined for the third day in a row on the twin worries of the U.S. debt downgrade and the persistent problems in the euro-zone.

Mitsubishi UFJ Financial Group Inc added 0.3% or 1 yen to 363 yen and Sumitomo Mitsui Financial added 0.3% to 2,266 yen. Nomura Holdings declined 1.5% to 322 yen.

Toyota Motor fell 0.9% to 2,910 yen and Sony Corp declined 2.2% to 1,701 yen and the company said one of its warehouses was burned down in London riots.

Olympus declined 4% to 2,305 yen and Cannon Inc dropped 0.4% to 3,450 yen.

Energy linked companies fell after oil dropped 0.5% and traded near $80 a barrel. The sharp reversal in oil in the last two weeks knocked off 20% and traded at its low in a year.

Inpex Corp rebounded 2.2% to 511,000 yen and Mitsui OSK Lines added 0.6% to 357 yen. Japan Petroleum Exploration Co. fell 0.5% to 3,345 yen.

Mitusi & Company added 0.7% to 1,300 yen and Itochu Corp gained 6 yen to 814 yen. Marubeni Corp expanded 6 yen to 488 yen.

Tokyo Electric soared 15% to 449 yen on the speculation that the company will survive with the strong government backing.

Kansai Electric Power Co sored 8.3% to 1,304 yen and Chubu Electric Power Co added 7.8% to 1,356 yen.