Nikkei Soars 2.5%, Tokyo to Host 2020 Olympic Games

Hiruki Nakamura
09 Sep, 2013
New York City

Nikkei index in Tokyo soared after Tokyo was selected to host summer 2020 Olympic Games. Real estate companies led the advance of 2.5% in the Nikkei. Japan revised higher second quarter economic growth to an annual rate of 3.8% and the yen declined 0.6%.

[R]5:00 PM Tokyo – Nikkei index in Tokyo soared after Tokyo was selected to host summer 2020 Olympic Games. Real estate companies led the advance of 2.5% in the Nikkei. Japan revised higher second quarter economic growth to an annual rate of 3.8% and the yen declined 0.6%.[/R]

Nikkei 225 Stock Average increased to a five-week high. The Nikkei index increased 2.5% to 14,205.23 and the Topix index gained 2.2% to 1,173.

In trading, 2.81 billion shares changed hands and real estate and construction companies led the gainers.

The yen declined 0.6% to 99.71 against one U.S. dollar.

Tokyo to Host 2020 Olympic Games

Real estate companies extended gains after Tokyo was selected to host the summer Olympics Games.

International Olympic Committee had estimated 152 billion yen of construction projects may be completed in advance of the games and the economic impact of the games on the construction industry is about 475 billion yen.

The total economic effect of the Olympic Games was estimated as much as 3 trillion yen on the wider economy, Tokyo 2020 Bid Committee said on its website. The estimates are generally comprehensive and exaggerated as many other cities discover a dramatic lag and bust after the games.

Atlanta, Beijing, London, Sydney, Vancouver and Athens are some of the recent host cities where the expected economic impact never materialized.

Q2 GDP Estimate Revised Higher

Gross domestic product of Japan was revised higher to an annualized rate of 3.8% from the first quarter compared to the previous estimate of 2.6%, the Cabinet Office said today in Tokyo.

Person consumption growth in the second-quarter declined and spending in the period fell to an annual rate of 2.9% from 3.3% in the first quarter.

Japan is bracing for an increase in sales tax from April to 8% from current 5% and then increase to 10% in October 2015.

Stocks in Review

GlaxoSmithKline Plc, the UK based healthcare group sold its nutritional drinks brands Lucozade and Ribena to Suntory Beverage & Food Ltd. for £1.35 billion in cash. The transaction is expected to complete by the end of the year.

In fiscal 2012, annual sales of Glaxo’s these two brands were about £0.5 billion and consolidated sales in fiscal 2012 of Japanese firm Suntory Beverage were more than £12 billion with total number of 29,000 employees across Japan, Europe, Asia Pacific and the Americas.