Nikkei Surges on Weaker Yen, Rising Earnings adn Share Buy Back Plans

Hiruki Nakamura
12 Feb, 2015
New York City

Weaker yen, rising earnings and a growing stock buyback announcement lifted Nikkei to the highest level in 7

[R]4:30 PM Tokyo – Weaker yen, rising earnings and a growing stock buyback announcement lifted Nikkei to the highest level in 7 ½ years. Core machine orders in December climbed 8.3% compared to 1.3% gain in November and for the year soared 11.4%. Asahi, Dentsu, Kirin, Marui and Rakuten reported rising earnings and offered improving sales outlook.[/R]

Stocks in Tokyo surged a day after holiday after the yen dropped to 120-level and machinery orders surged at a rate double than expected.

Investors ignored the Greece negotiations and focused on the rising earnings from domestic companies. Also, weaker yen and rising number of companies announcing stock buyback also supported strong market advance.

The Nikkei index closed at the highest level since July 2007.

Producer price index in January dropped 1.3% to 103.3 from the revised 0.5% decrease in December, the Bank of Japan said today.

On a yearly basis, prices added 0.3% following the revised 1.8% gain in the previous month.

The bank added export prices in the month slipped 1% from previous month and 3% from a year ago month while import prices declined 3.4% in month and 9.1% from a year ago month.

Core machine orders in December climbed 8.3% to 853.6 billion yen compared to 1.3% gain in November, the Cabinet Office reported today.

Manufacturing orders in December surged 24.1% to 396.9 billion yen and non-manufacturing orders climbed 7.2% to 477.0 billion yen.

For the fourth quarter, core machine orders edged up by 0.4% to 2.42 trillion yen and for the year jumped to 4%.

On a yearly basis, core machine orders surged 11.4% following the 14.6% decline in the previous month.

For the first quarter of 2015, core machine orders are forecasted to increase 1.5% on quarter but drop 0.9% on year to 2.46 trillion yen.

The Nikkei 225 Stock Average climbed 327.04 or 1.9% to 17,979.72 and the broader Topix index jumped 21.67 to 1,449.39.

The yen advanced to 120.36 against one dollar.

Stocks in Review

Asahi Group Holdings Ltd jumped 2.5% to 3,788 yen after the beer and alcohol beverage maker said revenues in the year ending in December climbed 4.2% to 1.79 trillion yen from 1.71 trillion yen a year ago period.

Net income in the year surged 11.9% to 69.12 billion yen compared to 61.75 billion yen and diluted earnings per share jumped to 148.80 yen from 126.26 yen in the same period a year ago.

The company forecasted net sales for the year to jump 3.6% to 1.85 trillion and net income to climb 8.5% to 75 billion yen.

Dentsu Inc climbed 3.9% to 4,835 yen after the communication service provider stated net sales in the nine-month period ending in December jumped 4.9% to 1.74 trillion yen from 1.66 trillion yen a year ago period.

Net income in the year climbed 23.8% to 25.62 billion yen compared to 20.69 billion yen and diluted earnings per share jumped to 148.80 yen from 126.26 yen in the same period a year ago.

Dentsu forecasted net sales for the fiscal 2015 to be about 2.43 trillion yen but net income to soar 39.1% to 40.90 billion yen from earlier estimate of 29.40 billion yen.

Kirin Holdings Co Ltd gained 1.1% to 1,631 yen after the beverage maker reported net sales in the year ending in December dropped 2.6% to 2.20 trillion yen from 2.25 trillion yen a year ago period.

Net income in the year tumbled 62.2% to 32.39 billion yen compared to 85.66 billion yen and diluted earnings per share dropped to 35.24 yen from 90.73 yen in the same period a year ago.

The company forecasted net sales in the first-half to jump 3.2% to 1.09 trillion yen and for the year net sales to climb 3.4% to 2.27 trillion yen and net income to surge 23.5% to 40 billion yen.

Marui Group Co Ltd surged 16.2% to 1,337 yen after the department store operator plans to buy back 5.84% of its shares or up to 15 billion yen or $127 million between February 12 and April 30 and cancel 12.55% outstanding stock on March 20.

Rakuten Inc fell 0.4% to 1,682 yen after the online travel and retailing company reported revenues in the year ending in December soared 15.4% to 598.57 billion yen from 518.57 billion yen a year ago period.

Net income in the year surged 63.5% to 71.10 billion yen compared to 43.48 billion yen and diluted earnings per share jumped to 53.15 yen from 32.41 yen in the same period a year ago.

Rakuten said Viber, the Internet based telephone service, monthly active users in the fourth quarter increased to 236 million.

Skylark Co Ltd slipped 1.3% to 1,169 yen after the restaurant operator said revenues in the year ending in December increased 2.3% to 340 billion yen from 332.48 billion yen a year ago period.

Net income in the year soared 33.6% to 9.47 billion yen compared to 7.09 billion yen and diluted earnings per share increased to 49.47 yen from 37.29 yen in the same period a year ago.

The company forecasted net sales in the fiscal 2015 to jump to 2.8% to 349.50 billion yen and net income to climb 50% to 14.19 billion yen.