Tokyo Follows U.S. Gains

Mayank Mehta
16 Jul, 2009
New York City

Stocks in Japan closed higher after China reported a rebound in the economy and U.S. stocks jumped on Intel earnings. Industrial and commodities related stocks in Tokyo closed higher. Mitsubishi UFJ plans to raise as much as $4 billion.

[R]7:00 PM Tokyo, 5:00 PM New York – Stocks in Japan closed higher after China reported a rebound in the economy and U.S. stocks jumped on Intel earnings. Industrial and commodities related stocks in Tokyo closed higher. Mitsubishi UFJ plans to raise as much as $4 billion.[/R]

As politicians jockey for positions ahead of elections, talks of trimming wasteful spending gained grounds in the media coverage. Investors will welcome any serious attempt to cut wasteful spending in the name of economic revival.

The growing number of senior LDP party members are seeking alternative to Prime Minister Taro Aso in the upcoming election. The opposition party DPJ is expected to win the election.

The Nikkei 225 Index in Tokyo closed higher 74.91 or 0.81% to 9,344.16 and yen closed at 93.72 to a dollar.

Commodities gained ground in international markets after U.S. market indexes surged 3% and China reported in the second quarter economy grew at 7.9%.

The Bank of Japan revised their economic assessment and said that the economy has ‘stopped worsening.’

Gainers & Losers

Bridgestone surged 5.8% to 1,562 yen after two brokers lifted their outlooks on the largest tire maker. UBS recommended the stock with ‘buy’ rating and Mizuho Securities revised its operating earnings more than 200% citing improved demand. The news was first reported on Bloomberg.

Sumitomo Metal Mining Company increased 2.7% to 1,278 yen Mitsubishi increased 4.6% to 1,695 yen, Marubeni Corp added 2.8% to 403 yen and Mitsui & Company increased 4.3%.

Cannon Inc increased 1.7% to 3,080 yen, Sony decreased 0.9% to 2,285 yen and Olympus increased 2.4% to 2,120 yen.

The surge of 7.3% in Baltic Dry Index lifted stocks of shipping companies. Kawasaki Kisen Kaisha Lt gained 3.5% to and Nippon Yusen increased 0.3% to 399 yen and Mitsui OSK Lines Ltd edged up 1.9% to 585 yen.

Fanuc Ltd increased 2.1% to 7,390 yen and Hitachi Construction Machinery increased 2.8% to 1,494 yen.

Mitsubishi UFJ Financial Group declined 0.9% to 533 yen after it filed with the Tokyo Stocks Exchange its plan to raise as much as 370 billion yen in non-convertible preferred stocks.

Nikkei 200 Average Movers

Taiheiyo Cement Corp led the decliners in the Nikkei 225 index of 5.1% followed by losses in Sanyo Electric Co Ltd of 4.3%, in Tokyu Corp of 3.2%, in Shinsei Bank, Limited of 3.1% and in Asahi Breweries Ltd of 2.5%.

Chiyoda Corp led gainers in the Nikkei 225 index with a rise of 7.5% followed by gains in Mazda Motor Corp of 6.1%, in Bridgestone Corp of 5.7% and JGC Corp of 5.3%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 74.91 or 0.81% to 9,344.16, Hang Seng index in Hong Kong increased 103.21 or 0.57% to 18,361.87, CSI 300 index in China higher 7.94 or 0.23% to 3,501.24. ASX 200 index in Australia increased 71.10 or 1.81% to 3,995.60. The FTSE Bursa KL Composite index in Malaysia closed higher 11.64 or 1.06% to 1,108.88.

The Kospi Index in South Korea increased 11.36 or 0.80% to close at 1,432.22. SET index in Thailand closed lower 5.12 or 0.87% to 582.74 and JSE Index in Indonesia decreased 5.33 or 0.25% to 2,117.95. The Sensex index in India decreased 2.99 or 0.02% to 14,250.25.