Nikkei Jumps 1.6%, Japanese Retail Sales up 3.6%

Nigel Thomas
28 Jun, 2012
New York City

Stocks in Tokyo advanced and the benchmark Nikkei jumped 1.6% to close at a six week high. Retail sales in May increased at a slower pace than in April but were ahead of expectations. Institutional investors increased exposure to domestic stocks.

[R]6:30 PM Tokyo – Stocks in Tokyo advanced and the benchmark Nikkei jumped 1.6% to close at a six week high. Retail sales in May increased at a slower pace than in April but were ahead of expectations. Institutional investors increased exposure to domestic stocks.[/R]

The benchmark indexes in Tokyo jumped as short sellers unwind positions and institutional investors add more exposure to domestic stocks in six months.

The benchmark Nikkei index increased to the highest in six weeks however trading volume was thin. Insurance, banks and drugmakers led the gainers today.

Retail sales increased 3.6% from a year ago in May after increasing at a 5.7% in April according to the latest data released by the Trade Ministry.

The Nikkei 225 Stock Average advanced 143.62 or 1.6% to 8,874.11 and the broader Topix index gained 13.33 or 1.8% to 745.48.

The yen edged higher to 79.60 against one dollar and fell to 99.87 against the euro.

Japanese investors turned inwards after expectations of any specific steps at the meeting of European leaders scheduled today were low.

European leaders are expected to finalize the banking union across the region but a new alliance between the leaders of France, Italy and Spain is likely to push for additional stimulus and Germany, Holland and Austria are expected to demand greater fiscal discipline from its Southern neighbours.

Stock Movers

Retailers were in focus after the release of the latest data.

Nitori Holdings Co gained 4.7% to 7,400 yen after the company reported 11% increase in sales in the quarter to May 20 and net income soared 26% to 9.86 billion yen.

Apparel retailer Shimamura increased more than 2.5% to 9,010 yen and Sagami Co increased 2 yen to 129 yen. Marushohotta Co added 1 yen to 49 yen and Edion Corp gained more than 3% to 400 yen.

Japan Tobacco extended gains for the second day by 3.8% to 2,393 yen on the expectation of a price increase of as much as 5% in the next two years.

Home developers and builders gained for the second day on the hopes of advanced sales ahead of sales tax increase in 2014.

Kajima Corp gained nearly 1.3% to 227 yen and Taisei Corp fell 0.4% to 212 yen. Sekisui House Ltd increased 1.6% to 734 yen and Daito Trust Construction Co Ltd added 0.8% to 7,400 yen.

Tokyo Tatemono Co., Ltd increased 6 yen to 292 yen and Mitsui Fudosan advanced 41 yen to 1,498 yen and Sumitomo Realty & Development Co. increased 46 yen to 1,888 yen.

Eisai Co, Ltd increased 3% to 3,475 yen after its U.S. partner won a regulatory approval in 13 years for the first obesity medication in 13 years.

Kansai Electric Power Company, Inc added 9 yen to 935 yen and Tokyo Electric Power fell 2 yen to 153 yen.

Takashimaya Co. advanced for the third day to 603 yen after the retailer reported fiscal first quarter operating profit increased 69% to 5.88 billion yen.

Toyota Motor advanced 80 yen to 3,110 yen and Honda Motor Co. increased 56 yen to 2,663 yen and Nissan Motor Co Ltd gained 13 yen to 734 yen.

Sony Corp rose 5 yen to close at 1,097 yen and Panasonic Corp closed up at 13 yen to 631 yen. Toshiba added 6 yen to 295 yen.

Olympus Corp up 3 yen to 1,247 yen, Nikon advanced 46 yen to 2,379 yen and Fanuc Ltd increased 360 yen to 12,760 yen. Canon Inc gained 35 yen to 3,110 yen.

Komatsu Ltd closed up at 39 yen to 1,884 yen and Hitachi Construction Machinery Co rose 2 yen to 1,478 yen after Chinese manufacturing shrank for the eight month in a row.

Inpex Corp added 1.1% to 434,000 yen and Japan Petroleum Exploration Co. gained 44 yen to 2,983 yen as the prices of crude oil fell in international markets.

Mitsui O.S.K. Lines, Ltd rose 4 yen to 276 yen; Kawasaki Kisen Kaisha, Ltd up 2 yen to 155 yen and Nippon Yusen K.K. added 2 yen to 209 yen.

Fast Retailing Co. declined 70 yen to 15,720 yen and J. Front Retailing Co. Ltd increased 3 yen to 391 yen.

Mitsubishi UFJ Financial Group gained 10 yen to 372 yen and Sumitomo Mitsui Financial Group advanced 68 yen to 2,588 yen. Nomura Holdings, Inc rose 2 yen to 283 yen.

Credit Saison Co Ltd advanced 74 yen to 1,725 yen.

Nippon Steel rose 3 yen to 177 yen and JFE Holdings Inc gained 23 yen to 1,305 yen.