Tokyo Stocks Surge, Banks Lend More

123jump.com Staff
08 Dec, 2008
New York City

Tokyo stocks surge on optimistic outlook for the U.S. stimulus plan from President-elect Obama. Bank lending increased in November at a fastest pace in 16 years. Construction equipment makers surged on the optimism that the U.S. stimulus plan will increase exports.

[R]5:00AM New York, 7:00PM Tokyo - Tokyo stocks surge on optimistic outlook for the U.S. stimulus plan from President-elect Obama. Bank lending increased in November at a fastest pace in 16 years.[/R]

Japan market averages surged on the expectations that the U.S. president-elect Barack Obama will unveil a multi-billion-dollar infrastructure program to lift the economy out of recession.

In Tokyo trading Nikkei 225 rose 5.2% or 411.54 to 8,329.05, and the broader Topix Index soared 3.3% or 26.06 to 812.08.

In the first section of the Tokyo Stock Exchange 6.9 billion shares worth 509 billion yen were traded and in the second section 131 million shares valued at 1.1 billion yen changed hands.

Of the Nikkei 225 index stocks 217 rose and 8 declined. Furukawa Electric Industries led advancers in the index shares with a rise of 16% followed by Nisshinbo gaining 12.7%.

Obama Administration Plans Infrastructure Program

U.S. President-elect Barack Obama said at the weekend during his weekly address on radio and the internet that he will invest in a massive infrastructure program to rebuild the nation’s highways, install new computers in classrooms, broaden high-speed internet to underserved areas and modernize hospitals.

The government spending is expected to save or create 2.5 million jobs and increase the already bloated government debt to a new high. Obama did not say where he is going to funds for such a large stimulus. Bush administration focus on Iraq war and bank bailout has already added nearly $1 trillion in deficit spending in the last two years.

Obama will also cut taxes for the middle-class Americans and direct aid to state governments which are expected to spend $136 billion for infrastructure projects.

The president-elect’s economic advisers would like to put legislation in place in time for the new president to sign on Inauguration Day, January 20.

Economists forecast that the forecasted $600 billion stimulus package Obama has proposed could bring the unemployment rate below 5% by 2012.

Banks Lending Soar 3.6% in November

The Bank of Japan reported today that total loans advanced 3.6% in November from 2.3% from the previous, rising the most in 16 years.

Lending by city banks gained 3.4% from 1.4% the previous months, while lending by regional banks edged up to 3.8% from 3.4%.

Bloomberg News reported today that associate director-general of the central bank’s surveillance department Michio Kitahara said companies borrowed from banks as commercial paper market remains tight.

Gainers & Losers

Furakawa Electric Industries led advancers in the Nikkei 225 index shares with a rise of 16% followed by increases in Nisshinbo Industries of 12.7%, in Taiyo Yuden of 12.4%, in Hitachi Construction Machinery of 11.6%, and Kawasaki Heavy Industries of 11.5%.

Construction equipment makers gained as the U.S. president elect Barack Obama outlined his proposed massive infrastructure investment program. Komatsu rose 11%.

Chuo Mitsui Trust led decliners in the Nikkei 225 index shares with a drop f 4.7% followed by losses in Mitsubishi UFJ Financial Group of 1.6%, in West Japan Railway of 1%, in Nippon Telegraph of 0.9%, and East Japan Railway of 0.7%.