BOJ Left Rates Unchanged, Tokyo up 2.6%

123jump.com Staff
23 Aug, 2007
New York City

Nikkei 225 index in Tokyo rose sharply after the Bank of Japan left the rates unchanged. The stocks rallied and yen gained against dollar after the rate decision. Isetan agreed to buy department store chain Mituskoshi for 295 billion yen. The retail industry is consolidating rapidly on declining retail sales and population. Separately, supermanrket sales in July fell 2.8%. Of the Nikkei 225 stocks 202 gained.

[R]7:00AM New York, 8:00PM Tokyo-Japanese stocks jumped tracking stronger US and European stocks. Bank of Japan votes to keep key bank rate at 0.5%. Japan and New Zealand discuss oil-sharing agreement. Supermarket sales fall 3% in July. Isetan to buy Mitsukoshi Ltd for 295 billion yen.[/R]

Japanese shares climbed higher spurred by growing investor confidence at home and in the U.S. Nikkei 225 jumped 2.61% helped by gains in financials and industrial shares. Of the stocks in the index, 202 gained, 18 retreated while 5 remained unchanged. In the index, 28 stocks gained over 5% and 5 dropped over 1%.

In Tokyo trading Nikkei 225 firmed 2.61% or 415.68 to 16,316.32 helped higher by financials and industrials stocks that tracked gains in Europe and US. The Bank of Japan decided Thursday by a majority vote of 8 to 1 to keep its key bank rate 0.5%. BOJ Governor Toshihiko Fukui, however, said today the bank will keep an eye on rates so they don’t fall too low. The yen dropped sharply, as stocks rose. Against the dollar, yen closed at 7-day lows at 115.92 from as low as 112 last week.

Japan’s Ministry of Economy, Trade and Industry indicated Thursday it will expedite talks with New Zealand for a bilateral agreement on an oil-sharing program using their stockpiles. Under the deal, New Zealand would be allowed to acquire options from Japanese firms to ensure oil procurement in the event of emergencies.

Japanese supermarket sales fell 2.8% in July year-on-year, the Japan Chain Stores Association said Wednesday. Overall sales at 8,658 outlets run by 79 companies totaled 1,180,383 million yen. On a same store basis, food sales fell 0.9% and clothing sales declined 10.2%.

Of the Nikkei 225 stocks financials and industrials shares gained. Komatsu Ltd led gains rising 8% followed by Sojitz Corp up 7.64%. Fujitsu Ltd gained 7.58%, Sumitomo Metals rose 7.53% while Sumitomo Min pushed higher 7.4%. Financials surged. Mitsui Trust Holdings, Marubeni Corp, Mizuho Financial, Sumitomo Mitsui, Mitsubishi UFJ F gained over 4%. Printing and paper manufacturing shares fell. Sapporo Holdings led decliners shedding 2.77% followed by Tokyu Corp down 2.06%. Nippon Suisan and Nicherei Corp lost 1.9% and 1.32% respectively. Toto Ltd eased 1.24%.

Millea Holdings Inc said Wednesday it expects to book an appraisal loss of some 1 billion-yen on investment in financial products incorporating U.S. subprime mortgage loans. The company said, however, its exposure to the US mortgage loans was ""limited"". Millea closed up 1.9%.

Departmental store, Isetan Co. will buy Mitsukoshi Ltd. for 295 billion yen by way of share allotment, the company announced Thursday. Mitsukoshi shareholders will receive 0.34 of a share in the combined company for each they already hold. Sales at the merged enterprise are forecast to rise to $14 billion annually. Isetan Co and Mitsukoshi Ltd shares closed higher 1.08% and 0.72% respectively.