Japan Stocks Flat; Cautious Outlook on Euro Talks

Nigel Thomas
28 Sep, 2011
New York City

Stocks in Japan barely budged in cautious trading. Resources linked stocks and banks edged higher on the hopes of a resolution to the Greek crisis. Germany offered vocal support to Greece.

[R]6:00 PM Tokyo – Stocks in Japan barely budged in cautious trading. Resources linked stocks and banks edged higher on the hopes of a resolution to the Greek crisis. Germany offered vocal support to Greece.[/R]

Stocks in Tokyo barely budged after growing optimism was received with skepticism in Asia and Japan. Markets have seen positive talks in the region lead to no action and the cost of bailout only to increase in the subsequent months.

The growing positive sentiment towards the euro zone has been dashed in the past with the lack of progress in resolving the Greek crisis and the widening debt contagion in the region.

The market optimism was driven on the hopes that the policymakers are looking to trim Greek debt in half, recapitalize the largest 50 banks and use the European Central Bank and the recently established rescue fund to offer more loan guarantees.

Market enthusiasm was tempered after 7 of the 17 member euro zone still demand higher sacrifice from banks while bailing out Greece and other troubled nations in the region.

The Nikkei 225 Stock Average added 0.1% to 8,615.65 and the broader Topix index added 0.7% to 754.07.

The yen edged lower to 76.36 from 76.25 against one dollar.

Stock Movers

Japan Tobacco Inc dropped 2.9% to 356,500 yen and gained earlier as much as 3% on the speculation that the government may sell its stake in the company to pay for nuclear disaster costs.

Japan Petroleum Exploration Co increased 1.3% to 2,860 yen and Inpex added 0.4% to 479,500 yen also gained on the speculation that the government may sell stake. Ruling Democratic Party of Japan leader Seiji Maehara called for stake sales that several government officials said contradicted long term trade policy.

The Tokyo Electric Power Company rose 8.2% to 263 yen.

Dai-ichi Life added 2.5% to 81,000 yen on the hopes that European policymakers will be able to contain the Greek crisis spreading to other smaller nations. The insurance company has exposure to Spain and Greece’s bonds worth $4.2 billion.

Nippon Yusen KK was unchanged at 210 yen and Mitsui OSK Lines Ltd added 3 yen to 309 yen.

Mitsubishi UFJ Financial Group rose 1.1% to 347 yen and Sumitomo Mitsui Financial Group increased 1% to 2,170 yen.

Mitsubishi Corp decreased 5 yen to 1,617 yen and Mitsui & Co fell 2.3% to 1,180 yen.

Toyota Motor increased 0.7% to 2,678 yen and Honda Motor Co. fell 12 yen to 2,309 yen and Nissan Motor increased 17 yen to 665 yen.

Sony Corp rose 1.9% to 1,503 yen, Panasonic Corp increased 3% or 23 yen to 763 yen and Canon Inc closed unchanged at 3,505 yen. Sharp Corp increased 10 yen to 620 yen.

Olympus rose 25 yen to 2,415 yen. Fanuc fell 30 yen to 10,740 yen. Kyocera declined 3.2% to 6,400 yen.

Komatsu decreased 14 yen to 1,692 yen and Hitachi Construction Machinery Co decreased 2 yen to 1,252 yen.