Japan Prepares $100 B Stimulus

123jump.com Staff
06 Apr, 2009
New York City

The benchmark stock index in Japan gained 1.2% after finance minister Kaoru Yosano said the government will unveil a $100 billion stimulus plan. Bank of Japan in its two-day policy meeting is considering to expanding the collateral for bank lending.

[R]5:00AM New York, 7:00PM Tokyo- Japan government is planning to unveil $100 billion stimulus package. Japan’s foreign financial institutions cut 15.5% of total workforce.[/R]

The benchmark stock index in Japan gained 1.2% after finance minister Kaoru Yosano said the government will unveil a $100 billion stimulus plan. The move comes after the G-20 summit where $1 trillion of global stimulus was announced.

Bank of Japan, which began its two-day policy meeting today, is also considering to expanding the type of municipal bonds that are accepted as collateral in order to empower regional banks to increase lending.

Investor sentiment was also boosted by a weakening yen.

In Tokyo trading Nikkei 225 gained 1.2% or 108.09 to 8,857.93, and the broader Topix Index dropped 0.1% or 0.39 to 830.97.

In the first section of the Tokyo Stock Exchange 24 billion shares worth 1.5 trillion yen were traded and in the section 279 million shares valued at 2.4 billion yen changed hands.

Of the Nikkei 225 index stocks, 146 gained, 72 dropped, and 7 were unchanged. CSK Holdings Corp. led gainers in the index shares with a rise of 19% followed by Clarion Co. Ltd gaining 11.9%.

Japan to unveil $100 billion Stimulus

Reuters News reported that Japan’s finance minister Kaoru Yosano said today the country will unveil a $100 billion stimulus package- adding 12 trillion yen in spending planned under previously announced stimulus measures- on Friday.

Japan is looking to create a safety net for non-permanent workers, increasing investment in solar power systems and interventions designed to help corporate spending.

Bank of Japan is reportedly considering expanding the type of municipal bonds that it accepts as collateral for its open market operations. Currently the central bank only accepts publicly placed municipal bonds.

The BoJ began its two-day policy review meeting today and market watchers expect it to keep its benchmark rate on hold.

""The prime minister has instructed us to compile measures that would include real spending of more than 2% of GDP as we take into account a fall in our economy, which is bigger than other leading nations, as well as the need for international cooperation,"" said Yosano.

Foreign Financial Institutions Cut Jobs

Nikkei News reported today that a survey by a consultancy firm showed that foreign financial institutions in Japan slashed their workforce by 15.5% of the estimated total workforce of 4,315 employees during the 15 months to March as the global economic crisis takes its toll.

Dollar Rises Against Yen

The dollar rose the most in four months to 101 yen. Weak yen helped market sentiment and lifted sentiment for exporters.

Gainers & Losers

CSK Holdings Corp. led advancers in the Nikkei 225 index shares with a rise of 19% followed by increases in Clarion Co. Ltd of 11.9%, in Mazda Motor Co. of 10.4%, in Pioneer Corp. of 9.6%, and Sumitomo Heavy Industries of 9.1%.

Bridgestone Corp. led decliners in the Nikkei 225 index shares with a fall of 4.7% followed by losses in Fukuoka Financial of 4.7%, in Mitsubishi Estate of 3.9%, in Konica Minolta Holdings of 3.5%, and Chiba Bank of 3.5%.

Financial stocks dropped. Mitsubishi UFJ fell 2.5% and Bank of Yokohama shed 1.7%.