Nikkei Extends Rally on the Fed's Gradual Withdrawal

Hiruki Nakamura
19 Dec, 2013
New York City

Nikkei in Japan soared following the Fed announcement of gradual tapering plan and low interest rate for two more years. The clarity form the U.S. Fed lifted market sentiment. Tokyo Electron estimated net loss on the write down of its solar business.

[R]4:30 PM Tokyo – Nikkei in Japan soared following the Fed announcement of gradual tapering plan and low interest rate for two more years. The clarity form the U.S. Fed lifted market sentiment. Tokyo Electron estimated net loss on the write down of its solar business.[/R]

Stocks in Tokyo surged after the U.S. Fed announced its tapering plan and low rates for the next two years.

The clarity on the interest rate and gradual nature of the taper lifted market averages. Investors were worried that the Fed may abruptly cut off the huge bond purchase program.

The sharp surge in the market indexes in Japan are partly fueled by the coordinated efforts among large central banks to keep rates low and provide economic stimulus through bond purchase programs in the U.S., Europe and Japan.

The Nikkei 225 Stock Average climbed 271.42 or 1.7% to 15,859.22 and the Topix jumped 12.58 or 1% to 1,263.07.

The yen closed at 103.95 against one dollar.

Stocks in Review

Toyota Motor Corp closed unchanged at 6,200 yen. Honda Motor Co gained 45 yen to 4,260 yen. Nissan Motor Co Ltd rose 2 yen to 892 yen.

Sony jumped 40 yen to 1,820 yen.

Softbank Corp closed unchanged at 8,930 yen. Fast Retailing Co soared 1,750 yen or 4.5% to 40,750 yen.

Nintendo Co., Ltd climbed 5% to 13,680 yen plans to develop games for smart-phones and tablets.

Tokyo Electron Limited rose 0.4% to 5,520 yen after the electronic products maker expects net loss of 22 billion yen in the year on the write-down of its solar business.

Tokyo Electron said sales for the year are expected to be flat at 605 billion yen.

In a separate news release, the company said it signed an agreement to merge its subsidiary Applied Materials, Inc that was acquired in September.

Tokyo Tatemono Co., Ltd surged 6.7% to 1,130 yen after the real estate developer lifted its net income outlook for the year by 19% to 9.5 billion yen.

Mitsubishi UFJ Financial Group Inc gained 1.7% to 660 yen after the bank agreed to acquire 72.01% stake in Thailand-based Bank of Ayudhya for 536 billion yen or 167.9 billion baht. The Ratanarak Group with 25% stake will remain a major investor of the Bank of Ayudhya.