Nissan, NEC in Electric Car Project; Stocks Fall

123jump.com Staff
22 Jun, 2009
New York City

Business sentiment among large manufacturers improves in June quarter as talks of economic recovery raise expectations. Japan agrees to advance emergency loan of $1 billion to Japan Airlines, lower than $2 billion sought by the airline. Nissan and NEC are partnering to make electric cars in the U.S.

[R]5:00AM New York, 7:00PM Tokyo - Business sentiment among large manufacturers improves in June quarter as talks of economic recovery raise expectations. Japan agrees to advance emergency loan of $1 billion to Japan Airlines, lower than $2 billion sought by the airline. Nissan and NEC are partnering to make electric cars in the U.S.[/R]

The benchmark stock index in Japan rose fractionally after business conditions for large scale manufacturing enterprises improved in the three months to June, according to a government report.

Companies are also optimistic that business conditions will continue to improve in the next quarter.

Investor sentiment was also heightened by Nikkei News report Nissan will start manufacturing electric cars in the U.S. and has sought loans from the U.S. for the development of fuel efficient cars. Nissan and NEC are expected to invest $1 billion in a car project that runs on electric batteries.

In Tokyo trading Nikkei 225 Index increased 0.4% or 40.01 to 9,826.27, and the broader Topix Index soared 0.4% or 3.51 to 922.48.

In the first section of the Tokyo Stock Exchange 21.5 billion shares worth 1.5 trillion yen were traded and in the second section 586 million shares valued at 5.1 billion yen changed hands.

Of the Nikkei 225 index stocks, 136 rose, 78 declined, and 11 were unchanged. Sapporo Holdings led advancers in the index shares with a rise of 18.4% followed by Fuji Electric House soaring 12%.

Business Sentiment of Large Manufacturers Improve

Japan’s cabinet office reported today that the big manufacturers have become less pessimistic, with the business sentiment index of large manufacturers easing to –13.2 in the three months to June from –66 at the end of March.

Sentiment is expected to rise to 4.8 in the July-September period and increase to 17.3 in the December quarter.

The BSI for large industries improved to –22.4 in the review period and ease to –2.6 in the third quarter and 8.7 in the fourth quarter.

Sentiment for mid-sized enterprises fell to –37, but is forecasted to increase to –15.1 in the September quarter and –2 in the three months to December.

The cabinet office said the sentiment of large non-manufacturers improved –27.8, while mid-sized non-manufacturing enterprises improved to –40.3%. Non-manufacturing small enterprises also edged up to –48.6.

Japan to Advance Emergency Loan to JAL

Reuters News reported today that Japan’s finance minister Kaoru Yosano said the government will advance a loan to Japan Airlines Corp. after a request by transport minister Kazuyoshi Kaneko.

The loans of 100 billion yen will be advanced through the Development Bank of Japan. However, the report notes that JAL is seeking around 200 billion yen.

""The airline firm JAL and the airline industry are very important for the Japanese economy as well as for the people, and it is important to maintain airlines in Japan in order to operate internationally, too,"" said Kaneko.

International Air Transport Association said recently global airline will lose about $9 billion this year.

Nissan Explores Electric Car Project

The Nikkei News reported today that Nissan Motor Co. will start producing electric vehicles at a plant in Smyrna, Tennessee in the U.S.

Nissan will invest 50 billion yen into the project to produce green vehicles and will consider injecting an additional 50 billion yen depending on demand. The automaker is currently seeking low-interest loans from the U.S. government.

According to the report, the plant has the potential of producing 50,000 to 100,000 of the eco-friendly vehicles a year by 2012.

Also a production facility for high-capacity lithium ion batteries at the Smyrna site will be constructed through a partnership with NEC Corp.

In Japan, Nissan plans to assemble up to 50,000 electric cars a year starting in 2010, with some of these vehicles to be exported to the United States.

Gainers & Losers

Energy stocks declined after crude oil prices shed 2.6% to $69.60 per barrel. Inpex Holdings fell 2.4%.

Shipping lines dropped. Kawasaki Kisen dipped 1.6% and Mitsui O.S.K. plunged 1.5%.

Nikkei 200 Average Movers

Sumitomo Corp led the decliners in the Nikkei 225 index of 3.7% followed by losses in Pioneer Corp of 3.0%, in Sompo Japan Insurance Inc of 2.9%, in Shin-Etsu Chemical Co Ltd of 2.9% and in Softbank Corp of 2.3%.

Sapporo Holdings Ltd led gainers in the Nikkei 225 index with a rise of 18.4% followed by gains in Fuji Electric Holdings Co Ltd of 12.0%, in Meidensha Corp of 9.5% and Furukawa Co Ltd of 7.7%.