Surging Trade Surplus in Japan

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

Stocks in Tokyo added 0.2% to 16,435.74 in Nikkei 225 index. August trade surplus soared on sharp rise in auto exports to China and Middle East. Exports to the U.S. edged 4.6%, to the EU increased 15.6%, and to China surged 23.8%. Auto exports to China soared 88%. Yen traded volatile. Retailers were in focuse after a deal between Yamada Denki and Kimuraya. Thailand, Philippines, and Indonesia added more than 1% in regional trading.

[R]6:00AM New York, 7:00PM Tokyo –Stocks in Tokyo rise. August trade surplus surge.[/R]

Japan stocks gained propped by forecast beating trade surplus figures for August. Financial companies also weighed in on gains on expectations weakening U.S. housing and retail markets will force a further rate cut.

In Tokyo trading Nikkei 225 rose 0.21% or 34.01 to 16,435.74. Retailer Dowa Holdings led the gainers with a rise of 7.35%.

According to the Finance Ministry August trade surplus soared to 743.2 billion yen on surging car and steel exports to Europe and the Middle East. Exports rose 14.5% compared to 11.5% in July. However, imports rose at 5.7%, sharply lower than rate 15% in July. The surplus quadrupled from a year ago.

Exports to the U.S. gained 4.6% and to the European Union also edged up by 15.6% from 13.1% in July. Shipment to China gained 23.8% from 20.6% in July led by a sharp rise of 88% in auto shipments.

The yen fell against the dollar at 114.83 from 114.78. The yen has risen more than 7% against the dollar since the end of June. Oil prices slipped 1.8% to $79.53 per barrel, the biggest fall since August 17. Metal prices also retreated. Zinc shed 0.6% and nickel declined 1.7%.

Of the Nikkei 225 stocks, Dowa Holdings led the gainers, climbing 7.32%, followed by a rise of 6.12% in Mitsubishi UFJ Nicos, 5.71% in GS Yuasa Corporation, 5.03% in Hitachi Zosen and 4.71% in Yokohama Rubber. Kajima Corporation led decliners with a loss of 7.58%. Inpex Holdings lost 5.83%, followed by NTT Docomo down 3.6% and Tokyo Dome Corp fell 3.15% respectively. Toyo Seikan slipped 2.77%.

Toshiba Corp jumped 4.2% ahead of earnings release and recent surge in nuclear reactor makers around the world.

Hino Motors close, 50% owned by Toyota, closed up 4%, after it raised its half year profit forecasts on rising demand from construction booms in Middle East and South America. Operating profit is estimated to rise 12% to 24 billion yen for the first six months ending September 30. Previously the company expected a 20% drop. Half year sales forecasts increased 9% to 66.5 billion yen.

Banks and realty groups closed higher on expectations that rate may be lowered in the U.S. after the October Federal Reserve meeting. Traders are expecting that interest rate may be lowered by 0.25%. The sentiment helped financial stocks to recover. Sumitomo Mitsui jumped 2.6%, Mizuho added 1.1%, and Sumitomo Realty increased 2.4%. Credit card processing service provider Aeon Credit Service soared 8.9%.

Retailers were in focus today after the news that Yamada Denki agreed to acquire Kimuraya Select and also raised its holding in Best Denki. Market has been expecting a consolidation in the industry.