Nikkei in 3-day Rally; Sixth Prime Minister Noda in 5 Years

Nigel Thomas
29 Aug, 2011
New York City

Stocks in Tokyo traded higher for the third day in a row. Japan selected its sixth prime minister in five years. Finance Minister Yoshihiko Noda is expected to win vote tomorrow in the lower house of the parliament.

[R]6:00 PM Tokyo – Stocks in Tokyo traded higher for the third day in a row. Japan selected its sixth prime minister in five years. Finance Minister Yoshihiko Noda is expected to win vote tomorrow in the lower house of the parliament.[/R]

The benchmark index in Tokyo edged higher after advancing for the first time in the last week after declining for four weeks in a row. The index advanced for the third day in a row.

Japanese Finance Minister Yoshihiko Noda was elected as head of the ruling Democratic Party of Japan on Monday succeeding Prime Minister Naoto Kan who resigned on August 26.

Noda was selected over Trade Minister Banri Kaieda in 215-177 vote for his fiscal conservative views.

The president of the Democratic Party will become Japan''s prime minister due to the party''s strength in parliament. Hence, Noda will become Japan''s sixth prime minister in the last five years.

Finance Minister Noda is expected to pass the vote in the lower house of the Diet tomorrow and take office this week.

Prime Minister Naoto Kan resigned Friday as the head of the ruling Democratic Party of Japan after parliament passed two bills. The ruling party is expected to elect new president on Monday.

Kan survived 15 months in the office and was the fifth prime minister in five years and suffered a blow to his credibility on the violation of a campaign financing law and weak response to March 11 triple disaster.

The yen edged lower to 76.90 from 76.87 after Japan appointed its sixth prime minister in five years.

Two day ago, Finance Minister Yoshihiko Noda proposed $100 billion credit facility to Japanese exporters as the yen surges to a 25-yer high, however the measure is likely to have little impact on the value of the yen.

The Nikkei 225 Stock Average added 0.6% to 8,851.35 and the broader Topix index gained 0.4% to 758.83.

Trading volume on the First Section of the Tokyo Stock Exchange declined to 1.95 billion from the week’s average of 2.1 billion shares.

Stock Movers

Elpida Memory soared 3.2% to 552 yen after the D-RAM spot prices recovered 3% in Taiwan. The third largest memory maker before today has lost 40% of its value in the year.

Renesas Electronics Corp increased 9 yen or 1.7% to 531 yen.

Mitsubishi UFJ Financial Group fell 1 yen to 334 yen and Sumitomo Mitsui Financial Group fell 1 yen to 2,187 yen. Mizuho Financial Group declined 1 yen to 113 yen.

Energy linked companies traded higher after crude oil in New York gained.

Inpex Corp decreased 0.2% to 491,500 yen and Japan Petroleum Exploration Co added 10 yen to 3,115 yen. AOC Holdings Inc increased 2 yen to 436 and on Friday after production delay in North Sea prompted an analyst downgrade.

Toyota Motor decreased 53 yen to 2,715 yen and Honda Motor Co. fell 30 yen to 2,415 yen and Nissan Motor was unchanged at 674 yen.

Sony Corp rose 45 yen to 1,637 yen and Panasonic increased 2 yen to 796 yen. Technicolor added 2.6% to 2.93 yen. Nintendo Co. Ltd added 230 yen to 12,950 yen.

Nikon Inc increased 21 yen to 1,693 yen. Canon Inc gained 10 yen to 3,545 yen.

Construction equipment makers liked to China closed higher. Komatsu fell 0.2% to 1,988 yen and Hitachi Construction Machinery advanced 0.7% to 1,393 yen.

Kansai Electric Power increased 35 yen to 1,392 yen. Dai-Ichi Life Insurance Co. increased 200 yen to 88,100 yen.