Tokyo Stocks Rise in Tankan Suvey

123jump.com Staff
01 Oct, 2007
New York City

Stocks in Japan closed higher by 0.4% to 16,845.96. Tankan survey showed that large corporation have optimistic outlook for the businee and plan to invest in expanding their businesses. Of the Nikkei 225 stocks 196 closed higher. Sony completed its public offering in its life insurance unit near the high end of the filing range. Mitsubishi Motors led the stocks in the index with a rise of 5.2%. Yen weakened.

[R]6:00AM New York, 7:00PM Tokyo, Business confidence climbs near two year high at 23 points. Sony completed its life insurance unit IPO. Manufacturing survey showed appetite for investment. Yen weakens.[/R]

In Tokyo trading Japan’s stock index recovered from morning losses to close 0.38% higher or 60.27 to 16,845.96 on the first trading day of the week. Stocks were lifted by economic survey from the central bank showed improving business sentiment and plans by big companies to increase investment. Automotive exporter Mitsubishi Motor Corporation led advancers, climbing 5.14%, as the yen weakened.

Of the Nikkei 225 stocks 120 rose, 196 slipped and 9 traded unchanged. Nineteen stocks gained more than 1%.

Bank of Japan’s quarterly Tankan survey, for the last four weeks, showed the headline diffusion index, which measures sentiment at large manufacturers, stayed at 23 points. Economists had forecasted it would decline to 21 points. Sentiment climbed to a 2-year high of 25 points in December 2006, but has stayed at 23 points in the last three surveys.

Large companies increased their sales and profit estimate for the fiscal year ending March and plan to shore up investment by 8.7% from 7.7% in June. Japanese exports to China and Europe, coupled with the weakening yen, have helped to offset losses associated to the economic slowdown in the U.S.

However, big manufacturers’ outlook index for December was measured at 19 points, while for big non-manufacturers it stood at 21 points on expectations that business conditions will deteriorate to December due to the anticipated economic slowdown in the U.S. caused by the subprime mortgage crisis.

Overall index for large non-manufacturers slumped to 20 points compared to 22 points in June. However, confidence among non-manufacturers and smaller firms weakened as the five categories of small manufacturers and non-manufacturers fell from June.The manufacturer’s index was at 1 point in September from 6 points in June, while it fell to –10 from –7 in June.

Tankan index, a survey of more than 10,000 businesses including 2,400 large businesses, for workers demand declined to –7, the lowest since 1992, further indicating that there is a labor shortage. The Ministry of Labor said today that wages increased for the first time in nine months by 0.1% in August as unemployment rate hovered near a nine year low begins to spur wages.

Prime Minister Yasuo Fukuda said today he would strive to achieve primary trade balance by the fiscal year 2011.

Sony Corp completed initial public offering of its insurance unit, Sony Life Insurance Company. The company sold 800,000 shares at 400,000 yen, at the high end of the range of its filing range. In the largest offering in Tokyo for the year, Sony sold 725,000 and the rest were sold by the company. Sony share closed up 55 yen to 5,650 yen.

Of the Nikkei 225 index, Mitsubishi Motor Corporation led the gainers with a rise of soaring 5.14%, followed by gains of 4.52% in Tokyo Dome Corporation, 4.46% in Mitsubishi UFJ Financial Group, 4.37% in Fast Retailing, and 4.15% in Kikkoman Corporation.

Mitsubishi Motors advanced on weakening yen and positive earnings projections. Last week, the company revised half-year operating profit upward from 5 billion yen to 136 billion yen. Sales forecasts were reviewed up from 1.17 trillion yen to 1.27 trillion yen.

Mitsubishi UFJ rose on the stock split of 1 to 100 and reducing the minimum trading lot at 100 shares.

IHI Corporation led declining stocks in the index with a loss of 22%, followed by losses in Fuji Electric Company of 19.53%, Shimizu Corporation of 5.60%, Hitachi Zosen 4.62%, Mitsub Heavy Industry of 4.57%.