Stocks in Japan Surge as BoJ Participates in Dollar Liquidity Swap

Nigel Thomas
01 Dec, 2011
New York City

The Nikkei index in Tokyo trading soared after Japanese central bank participated in a coordinated move with five other central banks to offer more dollar liquidity to the euro zone. Yamaha, the latest Japanese company, indicated it will resume production in a month in Thailand.

[R]7:00 PM Tokyo – The Nikkei index in Tokyo trading soared after Japanese central bank participated in a coordinated move with five other central banks to offer more dollar liquidity to the euro zone. Yamaha, the latest Japanese company, indicated it will resume production in a month in Thailand. Resources and China linked companies gained.[/R]

The Nikkei index and Japanese stocks surged after U.S. Federal Reserve agreed to offer dollar swap lines to five other central banks and cut interest rate to 50 basis points above the swap rate.

U.S. Federal Reserve offered more dollar liquidity arrangement to the central banks from December 5 on the hopes that more dollar lending will ease the tightening lending conditions in the euro zone and rising yields for Spain, Italy and other smaller member nations.

The move is intended to offer more dollar liquidity in the euro zone as banks and companies struggle to attract new capital. The Fed opened the swap lines with the central banks of UK, Canada, the euro zone, Japan and Switzerland.

The market move was also positive after China lowered its bank reserve ratios and opened more liquidity in the financial system.

The Nikkei 225 Stock Average increased 162.77 or 1.9% to 8,597.38 and the broader Topix index added 1.6% to 740.01.

The yen at close in Tokyo trading eased 0.5% to 77.88 per U.S. dollar.

Trading volume on the main board of Tokyo Stock Exchange was 1.26 trillion yen or $16.26 billion.

Stock Movers

Toyota Motor increased 58 yen to 2,567 yen and Honda Motor Co. rose 95 yen to 2,484 yen and Nissan Motor Co Ltd jumped 11 yen to 701 yen.

Sony Corp increased 37 yen to 1,409 yen, Panasonic Corp closed up 15 yen at 742 yen and Canon Inc rose 40 yen at to 3,460 yen.

Nintendo Co. Ltd declined 120 yen or 1% to 11,480 yen.

Olympus Corp increased 24 yen or 2.4% to 1,049 yen after the ex-chief executive Michael Woodford resigned from the board and urged shareholder to appoint new management with him in charge. Most shareholders contacted by 123jump.com in Tokyo and Osaka and are strongly against reappointing Woodford to the company and prefer to have a new management without Woodford.

Fanuc Ltd increased 790 yen to 13,060 yen and Kyocera closed up 210 yen at 6,970 yen. Nikon Corp added 8 yen to 1,779 yen.

Elpida Memory Inc rose 2.5% or 9 yen to 377 yen and Ulvac Inc soared 5.6% to 1,084 yen.

Pioneer Corp fell 1 yen to 367 yen and company is set to resume its operation in Thailand after devastating floods. Yamaha Motor Co. Ltd gained 7 yen to 1,053 yen on the media reports that the company may resume its production by the end of the year in Thailand.

Yamaha cut the production of 40,000 motorcycles after its parts and assembly operations and Thailand were hit by the flood waters.

Mitsui O.S.K. Lines, Ltd added 20 yen to 259 yen, Kawasaki Kisen Kaisha, Ltd increased 7 yen to 137 yen and Nippon Yusen K.K. rose 12 yen at 181 yen.

Daiichi Sankyo Ltd gained 2% to 1,400 yen after its Indian subsidiary Ranbanxy Laboratories Ltd won the U.S. regulatory approval to make the first generic version of cholesterol lowering drug Lipitor.

Dai-ichi Life increased 800 yen to 84,000 yen.

Ms&Ad Insurance Group Holdings, Inc rose 43 yen to 1,529 yen and NKSJ Holdings Inc rose 76 yen to 1,580 yen.

Mitsubishi UFJ Financial Group rose 10 yen at 338 yen and Sumitomo Mitsui Financial Group increased 62 yen to 2,151 yen.

Chinese economy linked companies gained after China lowered bank reserve requirements and permitted banks to offer more liquidity to the financial system.

Komatsu Ltd increased 137 yen to 2,032 yen and Hitachi Construction Machinery Co increased 97 yen to 1,423 yen.

Softbank Corp declined 5% or 128 yen to 2,419 yen, KDDI dropped 1.7% or 8,500 yen to 496,500 yen and NTT DoCoMo, Inc gained 2.3% to 138,100 yen.

Softbank and KDDI dropped on the rumors that NTT DoCoMo is close to launching the sale of Apple’s iPhone in Japan. NTT DoCoMo spokesperson in Tokyo denied rumors.