Tokyo Stocks Rise; Aeon Loss

123jump.com Staff
07 Jan, 2009
New York City

Japanese retailer Aeon Co Ltd forecasted its first annual loss in seven years. Sales in the first eleven months ending in November declined 1.2%. Listed companies in Japan are looking for a profit gain of 10% in the fiscal year ending in March 2009.

[R]5:00AM New York, 7:00PM Tokyo - Japan stocks rise on Obama stimulus plan. Aeon Co. Ltd. forecasts first annual loss in seven years.[/R]

Japan market indices rose buoyed by expectations that the proposed $775 billion stimulus package from the U.S. president-elect Barack Obama will help stimulate demand for commodities from Japanese companies.

A weakening yen also helped strengthen market sentiment.

In Tokyo trading Nikkei 225 index gained 1.7% or 158.4 to 9,239.24, and the broader Topix Index edged up 1.4% or 12.05 to 888.25.

In the first section of the Tokyo Stock Exchange 14 billion shares worth 952 billion yen were traded and in the second section 159 million shares valued at 1.7 billion yen changed hands.

Of the Nikkei 225 index stocks, 143 increased, 78 declined, and 4 were unchanged. Fuji Heavy Industries led advancers in the index shares with an increase of 21.2% on expectations that the U.S. stimulus plan will boost demand for raw materials and commodities from Japan.

Obama to Face Years of Trillion Dollar Deficits

U.S. President-elect Barack Obama said yesterday the country will face years of trillion dollar deficits on a planned $775 billion stimulus package.

For the fiscal year ending in September 2008, the U.S. budget deficit was $445 billion. President Bush administration has generated annual budget deficit for most of the years in the last eight years.

An estimated 40% of the stimulus package will be spent on tax cuts, while the proposed infrastructure spending program is expected to be the biggest since the 1950s.

Obama advisors reportedly said the president-elect''s stimulus package, which may soar to $850 billion on add-ons, will create about 3.2 million jobs by the first quarter of 2011.

The proposed tax cuts of up to $300 billion include $500 for most individuals and $1,000 for couples if one spouse is employed and more than $100 billion for businesses.

An estimated $77 billion will be used for unemployment benefits and for subsidies for health care for unemployed, while most will be earmarked for infrastructure projects such as rebuilding roads and bridges and alternative energy programs.

Listed Companies Expect Record Profits

Nikkei News reported today that 184 listed Japanese companies forecast that their fiscal 2008 sales and pretax profits will rise 10% year-on- year on record profits.

Separately, the online edition however reported merger and acquisition consultancy Recof Corp. said 60 capital acquisition deals were cancelled in 2008 due to the credit crunch and falling equities.

Gainers & Losers

Fuji Heavy Industries led gainers in the Nikkei 225 index shares with an increase of 21.2% followed by increases in Taiyo Yuden Co. of 18.6%, in Isuzu Motors of 18.3%, in Casio Computer of 18.6%, and Nikon Corp. of 15.1%.

Nippon Paper Group led decliners in the Nikkei 225 index shares with a fall of 10.8% followed by losses in Hokuetsu Paper of 8.8%, in OJI Paper of 8.4%, in Seven & I Holdings of 8.1%, and Nisshin Seifun of 7%.

Aoen''s Sales Decline 1.2% in Nine Months to November

Retailer Aeon Co. Ltd. reported today that the company''s same store sales in the nine months ending November dropped 1.2% from the same period a year ago as apparel sales plunged 4.4%.

The company forecasts that it may post net loss, first in seven years, at 2.5 billion yen for the year ending February on dropping sales, a write-down at U.S. unit Talbots and accounting changes.

Aeon had previously estimated profit between 11 billion yen and 15 billion yen.

Rival Seven & I Holdings is expected to announce its result of Thursday.