Nikkei in Second Weekly Rise of 3%, Japan Tobacco, Tokyo Steel in Focus

Nigel Thomas
17 Aug, 2012
New York City

The Nikkei index gained more than 3% for the second week in a row after investors covered short positions and the yen weakened. Japan Tobacco was volatile for the third day in a row after China proposed tobacco advertising ban and higher taxes.

[R]6:00 PM Tokyo – The Nikkei index gained more than 3% for the second week in a row after investors covered short positions and the yen weakened. Japan Tobacco was volatile for the third day in a row after China proposed tobacco advertising ban and higher taxes.[/R]

Stocks in Tokyo closed higher and two popular benchmark indexes reached a 3-month high after comments from German Chancellor Angela Merkel supporting measures from the European Central Bank to buy more bonds and four-month high building permits in the U.S.

The rising home construction generally indicates improving household formation and rising demand for electronics, automobiles and home related items.

Short covering in domestic auto and electronics companies continued for the second day in a row after the yen softened against the dollar and the euro.

The Nikkei 225 Stock Average increased 69.74 or 0.8% to 9,162.50, the highest since July 4. The broader Topix Index gained 6.69 or 0.9% to 765.81.

For the week, the Nikkei 225 Stock Average climbed 3.1% and extended gains for the second week after surging 3.9% in the previous week.

The yen weakened to 79.36 yen from 79.35 yen at close yesterday and traded lower against the euro to 97.49 from 97.47.

Stocks in Review

Japan Tobacco declined 3.7% after the health ministry in China said it plans to ban cigarette advertising and also increase sales tax. The stock earlier in the week had fallen as much as 5% and subsequently recovered after an Australian court on Wednesday banned branding on cigarette packs and asked companies to sell packs in plain packs.

The yen softness helped automakers and electronics exporters.

Honda Motor Co. climbed 63 yen to 2,642 yen and Nissan Motor Co Ltd gained 12 yen to 795 yen.

Nippon Steel added 7 yen to 177 yen and JFE Holdings Inc climbed 46 yen to 1,144 yen.

Tokyo Steel Manufacturing increased 5% to 296 yen after the furnace maker revised prices between 5% and 8% for scrap steel according to the information on its website.

Canon Inc added 3 yen to 2,767 yen, Seiko Epson Corp gained 10 yen to 543 yen and Ricoh Co Ltd increased 15 yen to 658 yen. Sony Corp climbed 18 yen at 944.

Panasonic Corp gained 15 yen to 588 yen, Toshiba added 10 yen to 278 yen and Nikon advanced 30 yen to 2,178 yen.

Sharp increased 9 yen to 184 yen on a speculation that Taiwan based Hon Hai Precision may take a higher stake of 20% in the company at 200 yen per share compared to previous deal of 9.9% stake at 500 yen a share. The news was first reported by the Nikkei business daily.

Nintendo Co. Ltd slumped 20 yen at 8,760 yen, Fujitsu up 0.6% to 321 yen and Pioneer Corp. gained 6 yen to 221 yen.

Fanuc Ltd jumped 290 yen to 13,410 yen and Komatsu Ltd climbed 49 yen to 1,791 yen and Hitachi Construction Machinery Co advanced 48 yen to 1,510 yen.

Yamada Denki declined 35 yen to 4,290 yen. Nitori Holdings Co plummeted 170 cents to 7,290 yen, apparel retailer Shimamura dropped 130 yen to 9,190 yen and Sagami Co slid 2 yen to 145 yen.

Fast Retailing Co. closed unchanged at 17,920 yen and J. Front Retailing Co. Ltd gained 6 yen to 394 yen.

Kajima Corp fell 1 yen to 225 yen and Taisei Corp added 5 yen to 224 yen. Sekisui House Ltd increased 7 yen to 749 yen and Daito Trust Construction Co Ltd gained 40 yen to 7,720 yen.

Tokyo Tatemono Co., Ltd grew 5 yen to 292 yen and Mitsui Fudosan advanced 26 yen to 1,564 yen and Sumitomo Realty & Development Co. climbed 45 yen to 2,024 yen.

Kansai Electric Power Company, Inc increased 8 yen to 677 yen.

Inpex Corp increased 1.5% to 487,500 yen and Japan Petroleum Exploration Co. jumped 30 yen to 3,205 yen.

Mitsui O.S.K. Lines, Ltd added 6 yen to 226 yen, Kawasaki Kisen Kaisha, Ltd up 1 yen to 113 yen and Nippon Yusen K.K. gained 5 yen to 177 yen.

Dai-Ichi Life Insurance increased 3% to 89,300 yen and gained the most in the Nikkei 225 index after the rating agency Moody’s said that the company’s recent purchase of 20% stake in the U.S. based Janus is positive for the bond holders.

Mitsubishi UFJ Financial Group gained 8 yen to 370 yen and Sumitomo Mitsui Financial Group jumped 50 yen to 2,514 yen. Nomura Holdings, Inc increased 5 yen to 285 yen.

Tokio Marine climbed 21 yen to 1,963 yen and Mito Securities surged 6% to 158 yen.

Credit Saison Co Ltd gained 10 yen to 1,850 yen.