Nikkei Surges 1.8% and Yen at 7-Month High on Fed Moves

Nigel Thomas
14 Sep, 2012
New York City

Tokyo markets rallied following the global markets advance after the U.S. Federal Reserve offered third stimulus to revive economic growth and weaken unemployment rate. The high yen may limit the future gains in the yen. Seven & I Holdings Co said its operating profit is expected fall 2%.

[R]7:00 PM Tokyo – Tokyo markets rallied following the global markets advance after the U.S. Federal Reserve offered third stimulus to revive economic growth and weaken unemployment rate. The high yen may limit the future gains in the yen. Seven & I Holdings Co said its operating profit is expected fall 2%.[/R]

Stocks in Tokyo traded higher after a global rally sparked by the U.S. Federal Reserve move to offer more monetary support to revive economic growth and lower chronic unemployment.

The open-ended move to purchase $40 billion of U.S. mortgage bond was a surprise to most market watchers and investors lifted market indexes in the New York, Europe and in many markets in Asia.

The benchmark index in Tokyo gained to a 3-month high and the index in Hong Kong surged to a 4-month high. The Sensex index in India gained to a high last seen in February.

The Nikkei 225 Stock Average jumped 164.24 or 1.8% to 9,159.39 and the broader Topix Index increased 12.65 or 1.8% to 756.88. For the week, the Nikkei climbed 3.2%, its largest weekly advance in a month.

For the year, the Nikkei index is up 8.3% trailing other markets in Europe, U.S. and emerging markets of India and Brazil.

The yen firmed against to a seven-month high to 77.13 against the dollar after the Federal Reserve announced its pledge to purchase more mortgage bonds with the help of newly printed money.

The high yen may blunt the future market gains in Tokyo. After the first stimulus provided by the Fed that lasted sixteen months to March 2010, indexes in Tokyo surged more than 22% when the yen was trading near 95 against the dollar.

After the second stimulus for seven months to June 2011, the Nikkei index advanced 12% in the three months when the yen was averaging 82 yen level against the dollar.

Stocks in Review

Mitsui O.S.K. Lines, Ltd surged 11 yen or 5.7% to 203 yen and Kawasaki Kisen Kaisha, Ltd gained 3 yen 3% to 104 yen and Nippon Yusen K.K. climbed 7 yen or 5% to 147 yen.

Itochu Corp increased 3% to 830 yen.

Toyota Motor jumped 1.4% to 3,215 yen, Honda Motor Co. increased 49 yen to 2,671 yen and Nissan Motor Co Ltd added 2 yen to 738 yen.

Nippon Steel gained 8 yen or 4.8% to 176 yen and JFE Holdings Inc soared 57 yen or 5.1% to 1,170 yen. Tokyo Steel Manufacturing gained 10 yen to 288 yen.

Electronic component suppliers to Apple closed higher after the mobile phone maker released its latest phone.

TDK up 0.2% to 3,080 yen, Murata Manufacturing Co increased 1.7% to 4,210 yen and Meiko Electronics Co Ltd added 0.4%. Foster Electric and Sumida Corp gained above 1%.

Canon Inc jumped 96 yen to 2,783 yen and Seiko Epson Corp climbed 19 yen to 528 yen and Ricoh Co Ltd advanced 29 yen or 4.5% to 673 yen. Sony Corp increased 33 yen to 983.

Panasonic Corp gained 8 yen to 564 yen after Moody’s rating service lowered its debt rating to Baa1 from A2 and highlighted weakening earnings and large debt load.

Nikon climbed 85 yen or 4.1% to 2,173 yen and Toshiba Corp, increased 6 yen to 260 yen.

Olympus gained 1.9% to 1,555 yen, Nintendo Co. Ltd jumped 210 yen to 9,530 yen, Fujitsu slumped 1.6% to 304 yen and Pioneer Corp. advanced 11 yen or 4.6% to 250 yen. Sharp Corp closed unchanged at 208 yen.

Hitachi Ltd gained 4.5% after the largest electronics firm in Japan said it plans to increase first-half dividend to 5 yen from 3 yen in the period a year ago.

Fanuc Corp. climbed 250 yen to 13,660 yen and Komatsu Ltd soared 72 yen or 4.5% to 1,681 yen. Hitachi Construction Machinery Co jumped 51 yen to 1,375 yen.

FamilyMart Co Ltd, the convenience chain operator declined 90 yen to 3,715 yen and Lawson plummeted 170 yen to 5,620 yen. Ito En Ltd slid 2 yen to 1,567 yen.

Seven & I Holdings Co dropped 58 yen to 2,323 yen after the convenience chain operator said first-half operating profit is likely to fall 2% to 147 billion yen or $1.9 billion. The operating profit is expected to decline for the first time in three years in the six month period.

Yamada Denki slumped 75 yen to 3,495 yen. Nitori Holdings Co plummeted 100 cents to 8,010 yen, apparel retailer Shimamura declined 110 yen to 9,050 yen and Sagami Co added 1 yen to 121 yen.

Fast Retailing Co. advanced 390 yen to 18,790 yen and J. Front Retailing Co. Ltd gained 7 yen to 431 yen.

Kajima Corp up 2 yen to 216 yen and Taisei Corp added 2 yen to 212 yen. Sekisui House Ltd increased 10 yen to 787 yen and Daito Trust Construction Co Ltd dropped 60 yen to 7,800 yen.

Credit Saison Co Ltd gained 28 yen to 1,866 yen.

Tokyo Tatemono Co., Ltd surged 22 yen or 8.6% to 279 yen and Mitsui Fudosan soared 83 yen or 5.5% to 1,603 yen and Sumitomo Realty & Development Co. climbed 109 yen or 5.5% to 2,085 yen.

Inpex Corp jumped 5.9% to 485,000 yen and Japan Petroleum Exploration Co. advanced 160 yen or 5.25 to 3,235 yen. Tokyo Electric Power Company, Inc. gained 3 yen to 133 yen.

Mitsubishi UFJ Financial Group increased 14 yen or 3.8% to 383 yen and Sumitomo Mitsui Financial Group jumped 111 yen or 4.5% to 2,585 yen. Nomura Holdings, Inc climbed 12 yen or 4.25 to 299 yen.

Tokio Marine soared 119 yen or 6% to 2,106 yen and Mito Securities surged 8 yen or 5.6% to 150 yen.