Tokyo Stocks Up 1.9%

123jump.com Staff
14 Sep, 2007
New York City

Stocks in Tokyo surged 1.9% on Friday and for the week were nearly unchaged. Broader index Topix declined 0.8% for the week and gained 1.4% in trading today. Banks, energy tradig companies, and real estate stocks led the advance. Toyota is planning to build its first domestic factory in Japan in 17 years with an investment of 100 billion yen. Sumitomo Metals Mining surged 7% after lifting its second half earnings by 46%.

[R]7:00AM New York, 8:00 PM Tokyo - Japanese stocks spike for the second day, with exporters buoyed by weakened yen. Thawing concerns of continued worsening of the global credit markets also lifts financial stocks. Oil and metal prices continue to rise. Toyota plans to invest 100 billion yen to build new car factory in 2009 in Japan to meet rising global demand. [/R]

Japanese stocks rose for the second day led by exporters buoyed by the weakening yen against a basket of major currencies. Financial markets were also on the rebound owing to fading concern of further turmoil in the global financial markets. Japan close up at 1.9%. Of the 225 Nikkei index stocks, 177 rose, 42 declined and the remaining 6 traded unchanged.

In Tokyo trading, the Nikkei 225 advanced by 1.9%, or 306.23 to 16,127.42. The broader Topix index gained 1.4% to 1,544.71. Export oriented stocks rallied after yen slipped to 115.10 to the dollar. A rally stocks prompted the slump in bonds. Japan’s 10-year bonds declined the most in two months. The yield on the benchmark 10-year bond rose 4.5 basis points to 1.575%. However, gains that were recorded by stocks largely offset the Wednesday’s tepid trading that was weighed down by news that Japan’s economy shrank by an annualized 1.2% in the second quarter. Core consumer prices, which are a measure of inflation, also fell by 0.1%.

Commodities and oil prices also continued to scale record highs lifting stocks in the sectors. Zinc soared 4%, copper rose 1.6% and oil touched a second day high of $80.09 a barrel.

Of the Nikkei 225 index stocks, beer producing company Sapporo Holdings paced gainers, rising 7.85% on news that U.S. hedge fund Steel Partners is still pursuing bid for the company. Toyo Seikan soared 6.85%, while Sumitomo Metals Mining gained 6.84%, boosted by an increase in nickel prices by 3% and increased income forecast by 46% to 89 billion for the six months ending September 30. Tokai Carbon Company and Sanyo Electric completed the top five gainers, adding 6.05% and 5.71% respectively.

Of the Nikkei 225 index stocks, Inpex Holdings led decliners, shedding 3.42%, while pulp and paper companies Mitsubishi Paper and Nippon declined by 1.82% and 1.66% respectively. Sumitomo Chemicals retreated by 1.32% followed by OJI Paper Company, which lost 1.26%.

News that US biggest mortgage lender Countrywide Financial Corp had secured $12 billion of financing and that the Bank of England had extended an additional 4.4 billion pounds to calm the credit markets by promoting interbank lending also helped spur financial stocks. Japan’s biggest bank Mitsibishi UFJ Finanacial Group led the lenders edging 4.45%. Mizuho, the second biggest bank, and Sumitomo Mitsui closed at 4.45% and 3.92% in that order.

News report in Japan suggested that Toyota plans to fund a domestic plant in Japan, for the first time in 17 years, with an investment of 100 billion yen to meet surging global demand for its models. Toyota closed up 2.35%.