Japan Stocks Rise 4.5%, Sumitomo Heavy Surges

123jump.com Staff
05 Nov, 2008
New York City

Stocks in Tokyo surged after the victory of Barack Obama in the U.S. Presidential election. Investors in Japan speculated that change in economic policies may revive the U.S. economy and exports from Japan faster. Sumitomo Heavy Industries surged 23% after it reported better than interim profit.

[R]5:00AM New York, 7:00PM Tokyo - Japan stocks surged after the Barack Obama victory in the U.S. Presidential election. Markets speculated that the change in the White House may revive the U.S. economy.[/R]

Japan stocks indices rose after the U.S. elections results. The president-elect Barack Obama is expected increase Federal funding to revive the economy and pull the U.S. army from Iraq.

Exporters rallied on the news that the Treasury may buy stakes in non-bank financial firms.


In Tokyo trading Nikkei 225 gained 4.5% or 406.64 to 9,521.24, and the broader Topix Index increased 6.2% or 56.21 to 966.91.

In the first section of the Tokyo Stock Exchange 28 billion shares worth 2.3 trillion yen was traded and in the second section 453 million shares valued at 4.6 billion yen changed hands.

Of the Nikkei 225 index shares 190 rose, 34 declined, and one was unchanged. Sumitomo Heavy Industries led advancers in the index shares with a rise of 22.9% and Softbank Corp. gaining 19.1%.

Japan''s Economy to Remain Sluggish in the Medium Term

The Bank of Japan Governor Maraaki Shirakawa said in a speech at Kisaragi-kai meeting in Tokyo with business leaders that the economy will remain sluggish for the next several quarters.

Shirakawa added that the country''s terms of trade- as a net exporter- has been more sever in Japan that in other major economies.

Japan''s exports in real terms have leveled off as economic growth in overseas economies has declined.

Shirakawa said, “The current shock that is threatening the world economy and Japan''s economy can be regarded as part of the process of correcting the unsustainable growth in the world economy and expansion in leverage that continued over the past several years.""

European Union Banks Slashes Loans to Japanese Banks

The Nikkei News reported today that the European banks are raising interest rates on borrowing and cutting back on loans to Japanese companies, as it becomes increasingly difficult to raise capital.

Separately, the edition noted that service sector growth rose 2%, declining the most in 13 years as consumers cut spending on theme parks and salon treatments.

Gainers & Losers

Sumitomo Heavy Industries led advancers in the index shares with a rise of 22.9% followed by rises in Softbank Corp. of 19.1%, in Inpex Corp. of 16.2%, in NGK Insulators of 16.2%, and Denso Corp. of 16.1%.

Sumitomo Heavy rose after profit in the six months ended September rose more than projected to 19.8 billion yen.

Inpex Corp. soared after crude oil for December delivery gained 10% to $70.53 per barrel. Mitsui & Co also increased 10.8%.

Commodity stocks rose as well as copper prices gained 6.4% and nickel edged up 8.1% on a falling dollar.

Financial stocks soared. Mizuho Financial Group increased 16.1% and Mitsubishi UFJ Financial Group advanced 10.8%.

Honda gained 13.4%, Isuzu edged up 13.4% and Nissan jumped 13.4%.

Fast Retailing led decliners in the Nikkei 225 index shares with a fall of 4.9% followed by losses in Isetan Mitsukoshi of 3.1%, in Kyowa Kirin of 2.4%, in Kikkoman Corp. of 2.2% and Astellas Pharmacies of 1.9%.

Company News

Japan Steel Works today lifted its full-year profit forecast to 19.5 billion yen from an earlier projection of 17.7 billion yen.