Nikkei in Strongest Rally in Five Months, Japan Tobacco Falls

Nigel Thomas
07 Sep, 2012
New York City

Japanese markets rallied and participated in the worldwide gains after the central bank in Europe followed through its promise to buy back bonds. Japan Tobacco dropped after France proposed to increase tax as early as next month. Toshiba Corp surged on the prospect of higher prices.

[R]5:00 PM Tokyo – Japanese markets rallied and participated in the worldwide gains after the central bank in Europe followed through its promise to buy back bonds. Japan Tobacco dropped after France proposed to increase tax as early as next month. Toshiba Corp surged on the prospect of higher prices.[/R]

Market indexes in Japan soared more than 2% and participated in a worldwide rally sparked by the policy announcement from the central bank in Europe to support the euro.

The widely anticipated and advertised move cheered markets at least for today but hard road lies ahead in repairing economies of the euro zone. Spain and Italy are still struggling with falling employment and government receipts and have structural competitive issues that will be hard to cure with monetary policies.

In addition, China announced a plan to finance 55 infrastructure projects with $158 billion of outlay that will increase road construction and bridges and urbanization in the hinterland.

The Nikkei 225 Stock Average climbed 191.08 or 2.2% to 8,871.65 and the broader Topix Index advanced 16.17 or 2.3% to 735.17. For the week, the Nikkei added 0.4%.

Stocks in Review

Yamaha Motor Co Ltd extended gains for the second day by 4.8% to 762 yen after the motorcycle maker lifted sales outlook in Indonesia by 100,000.

Toyota Motor climbed 3.4% to 3,200 yen, Honda Motor Co. soared 128 yen or 5.2% to 2,600 yen and Nissan Motor Co Ltd climbed 29 yen or 4% to 751 yen.

Nippon Steel surged 13 yen or 8.7% to 163 yen and JFE Holdings Inc jumped 102 yen or 10.7% to 1,058 yen. Tokyo Steel Manufacturing climbed 19 yen or 7.5% to 272 yen.

Canon Inc soared 113 yen or 4.6% to 2,589 yen and Seiko Epson Corp advanced 22 yen or 4.6% to 496 yen and Ricoh Co Ltd surged 29 yen or 4.9 to 624 yen. Sony Corp climbed 48 yen or 5.6% at 908.

Panasonic Corp gained 20 yen or 3.8% to 548 yen and Nikon climbed 81 yen or 3.9% to 2,159 yen.

Toshiba Corp, the maker of NAND flash chips surged 17 yen or 7.3% to 251 yen after OCZ Technology Group Inc said it is experiencing NAND component shortage to build its products.

Olympus added 0.7% to 1,459 yen, Nintendo Co. Ltd closed unchanged at 8,650 yen, Fujitsu advanced 4.6% to 316 yen and Pioneer Corp. increased 9 yen or 4.1% to 228 yen.

Sharp Corp gained 3% to 206 yen on media reports suggesting that the company is in advanced state to finalize its debt restructuring with banks regardless of the outcome of its negotiations with Taiwan based Hon Hai Precision.

Machinery makers and construction equipment suppliers soared after China finalized 60 construction projects this week.

Fanuc Ltd climbed 330 yen to 12,930 yen and Komatsu Ltd jumped 98 yen or 6.6% to 1,592 yen. Hitachi Construction Machinery Co advanced 59 yen or 4.7% to 1,319 yen.

Japan Tobacco dropped 4% after French government said it may increase tobacco tax by 6% next month. Japan Tobacco, last year controlled more than 16% market share in the second largest economy in the euro zone.

FamilyMart Co Ltd, the convenience chain operator slipped 15 yen to 3,655 yen, Lawson declined 70 yen to 5,680 yen and Seven & I Holdings Co slumped 21 yen to 2,297 yen. Ito En Ltd slid 4 yen to 1,541 yen.

Yamada Denki slumped 65 yen to 3,550 yen. Nitori Holdings Co plummeted 90 cents to 7,800 yen, apparel retailer Shimamura closed unchanged at 8,980 yen and Sagami Co added 1 yen to 117 yen.

Fast Retailing Co. increased 100 yen to 18,110 yen and J. Front Retailing Co. Ltd added 4 yen to 396 yen.

Kajima Corp gained 3 yen to 215 yen and Taisei Corp closed unchanged at 210 yen. Sekisui House Ltd climbed 27 yen to 748 yen and Daito Trust Construction Co Ltd increased 50 yen to 7,800 yen.

Tokyo Tatemono Co., Ltd gained 11 yen or 4.2% to 272 yen and Mitsui Fudosan advanced 41 yen to 1,522 yen and Sumitomo Realty & Development Co. jumped 46 yen to 1,996 yen.

Inpex Corp climbed 4% to 448,500 yen and Japan Petroleum Exploration Co. soared 145 yen or 5% to 3,025 yen. Tokyo Electric Power Company, Inc. gained 4 yen to 127 yen.

Mitsui O.S.K. Lines, Ltd increased 8 yen or 4.4% to 189 yen and Kawasaki Kisen Kaisha, Ltd added 1 yen to 95 yen and Nippon Yusen K.K. slid 1 yen to 143 yen.

Mitsubishi UFJ Financial Group gained 9 yen to 363 yen and Sumitomo Mitsui Financial Group jumped 62 yen to 2,457 yen. Nomura Holdings, Inc climbed 12 yen or 4.5% to 278 yen.

Tokio Marine advanced 90 yen or 4.85 to 1,977 yen and Mito Securities increased 6 yen or 4.4% to 141 yen.

Credit Saison Co Ltd declined 46 yen to 1,826 yen.