Tokyo Soars 2.6%, Drops 4% in August

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

Tokyo stocks rallied on the back of rise in New York trading. Exporters including Sony, Canon, and Fujifilm gained more than 5%. The Nikkei 225 index surged 2.6%, the strongest rebound in the last two weeks of trading. Nikkei 225 for the month fell 3.9% and broader index Topix dropped 5.7%.

[R]7:00PM New York, 8:00PM Tokyo - Japanese stocks jumped the most in a fortnight spurred by a weaker yen. Japan fiscal budget for 2008 is likely to reach 85 trillion yen. Industrial production shrank 0.4% in July while unemployment rate dropped to 3.6%.[/R]

Tokyo rallied Friday helped by a falling yen and hopes that the U.S. government may take action to prevent subprime lending crisis from widening to the general economy. Japan climbed 2.6% on increased buying, adding to the 0.9% gain yesterday. Of the 225 Tokyo shares 210 gained, 13 dropped and 2 remained unchanged. Of the index shares, 16 stocks gained over 5%.

In Tokyo trading Nikkei 225 rose 2.57% or 415.27 to 16,569.09 led by exporters. Against the U.S. dollar, the yen weakened to 116.22 from over 115 yesterday while it dropped to 158.87 to the euro from 157.48 Thursday.

Japan Finance Ministry announced Thursday it expects fiscal 2008 budget to grow to 85.71 trillion, driven higher by escalating debt-servicing costs and domestic tax grants. The 2007 budget stood at 82.91 trillion yen. This would be the second straight state budget increase in two years despite Japan’s efforts to rebuild its strained national finances. The Ministry of Economy, Trade and Industry reported Japan''s industrial production shrank a seasonally adjusted 0.4% in July drained by powerful earthquake that hit Niigata Prefecture and hurt auto production. The index of output at mines and factories stood at 108.1 against the base of 100 for 2000. The quake paralysed the automobile industry, as production of auto parts stopped.

Government said Friday unemployment rate dropped 0.1 percentage points to 3.6% in July, the lowest in 9 years, and second straight monthly decline. In July, the number of unemployed reached 2.34 million, down 340,000 from a year earlier, the Ministry of Internal Affairs and Communications said in a preliminary report. However, analysts were less optimistic, saying the improvement only resulted from a decline in the country''s potential labour force — the total of jobholders and unemployed — due largely to a mass retirement of baby boomers. The total dropped 290,000 in July from June to a seasonally adjusted 66.46 million.

The Natural Resources and Energy Agency said today that Japan''s July crude oil imports rose 7.1% to 338.63 million barrels from a year ago, the second straight monthly increase. Imports from the Middle East accounted for 85%. Saudi Arabia remained Japan''s largest oil supplier in July, with its exports down 3.9% to 89.03 million barrels followed by The United Arab Emirates shipments falling 10% to 79.81 million barrels. Qatar with exports to Japan rose 13.7% to 41.65 million barrels. Iran ranked fourth with shipments surging 10.2% to 35.45 million barrels.

Of the Nikkei 225 stocks, exporters led the rising stock helped by a weaker yen. Furukuwa Electrical led gainers rising 8.3% followed by Fujikura Ltd up 7.32% and Minebea Co Ltd closed higher 6.8%. Mitsui & Co rose 6.64%. Technology stocks, Sony Corp, NTT Data Corp, TDK Corp and Fujifilm Holdings gained 5.5%, 5.1%, 4.9% and 4.6% respectively. Industrial and motor shares gained strongly as well. Of the index shares, energy related stocks fell after leading yesterday’s rebound. AEON Co Ltd led decliners falling 2.4% followed by Chugai Pharmacy down 2.12%. Shionogi & Co lost 1.4%, Isetan down 1.23% and retailer Mistukoshi Ltd ended lower 1.2%.