Japan Struggles to Revive Aggregate Demand

Hiruki Nakamura
19 Nov, 2014
New York City

Stocks in Japan and the Nikkei and Topix index advanced and the yen edged lower. Investors pinned hope on the new round of economic stimulus but the Bank of Japan and government struggle to increase aggregate domestic demand.

[R]4:30 PM Tokyo – Stocks in Japan and the Nikkei and Topix index advanced and the yen edged lower. Investors pinned hope on the new round of economic stimulus but the Bank of Japan and government struggle to increase aggregate domestic demand.[/R]

Nervous investors cautiously stepped up to add more exposure to stocks as the Japanese government prepares for another stimulus package and Prime Minister Abe and other lawmakers prepare for snap election.

Investors are hoping that the next round of stimulus will increase aggregate demand as the Japanese consumers struggle with flat disposable income.

Corporate Japan is struggling to revive the growth in exports as the euro zone economies struggle to recover and Chinese government slowdown economic expansion.

The Nikkei 225 Stock Average slipped 55.31 or 0.3% to 17,288.75 and the broader Topix index edged up 1.66 to 1,396.54.

The yen closed down 0.9% to close at 117.26 against one dollar.

Stocks in Review

Dai-ichi Life Insurance Co Ltd closed unchanged at 1,711.50 yen after the insurance company reported insurance premiums in the first-half ending in September soared 16.4% to 3.46 trillion yen from 2.97 trillion yen a year ago period.

Net income in the period surged 157.3% to 123.36 billion yen compared to 47.94 billion yen and diluted earnings per share jumped to 113.16 yen from 48.33 yen in the same period a year ago.

The company’s subsidiary Dai-Ichi Prontier Life Insurance Co. said insurance premiums in the first-half climbed to 360 billion yen from a year ago period.

Toyota Motor Corp gained 0.4% to 7,025 yen after the largest automaker announced Tuesday that its fuel cell vehicle Mirai, meaning “future” in Japanese is scheduled to launch with a price tag of 7.24 million yen in December 2015.

The company aims to sell about 400 Mirai vehicles by the end of the next year and said it has already received orders for 200 vehicles from government offices.

To promote FCV vehicles, the government has granted subsidy of 2.02 million yen.

Terumo Corporation declined 4.7% to 2,687 yen and the medical equipment maker plans to offer convertible bonds worth 100 billion yen outside Japan to repay the debt and expenses.