Nikkei in Japan on Stable Footing, Japan Tobacco Drops 7%

Hiruki Nakamura
17 Dec, 2014
New York City

Stocks in Japan and in Asia stabilized but Nikkie index lacked direction. The yen gained a fraction and oil and gold closed up. Japan Tobacco plunged more than 7% on the worries of Russia sales and a possible increase domestic tax.

[R]4:30 PM Tokyo – Stocks in Japan and in Asia stabilized but Nikkie index lacked direction. The yen gained a fraction and oil and gold closed up. Japan Tobacco plunged more than 7% on the worries of Russia sales and a possible increase domestic tax.[/R]

Japanese and Asian markets stabilized after three days of volatile trading.

Nikkei 225 index traded between gains and losses in the session but the swings in prices were tighter in active trading.

Investors remained on the edge after Russian ruble collapsed and investors shifted out of the emerging markets and risky assets. In addition, continued weakness in commodities including metals, oil and iron ore kept resource stocks under pressure.

Gold and oil futures were stable in trading today but investors speculated that Russia may be forced to sell its gold as Russian companies race to raise $30 billion in foreign currencies before the end of the year to meet maturing debt obligations.

The Nikkei 225 Stock Average gained 64.41 or 0.4% to 16,819.73 and the broader Topix index slid 1.36 to 1,352.01.

The yen slipped 0.5% to 117.22 against one dollar.

Stocks in Review

Dentsu Inc gained 1.6% to 4,695 yen after the advertising and marketing service provider agreed to acquire the U.S.-based Rockett Interactive Inc.

Japan Tobacco Inc plunged 7.4% to 3,107 yen after the Goldman Sachs said Russia contributes between 20% and 25% of its operating profits of the tobacco producer and every 1% depreciation in Russian currency reduces its profit by almost 3 billion yen.

In addition, local media reports suggested that the government may scrap two tier tax system for cigarette sales in Japan and increase taxes to the highest level.

Skymark Airlines Inc surged 22% to 444 yen on a report the airline company will begin code-sharing operations with Japan Airlines on flights connected to Haneda Airport of Tokyo along with three other major domestic airports.