More Stimulus in Japan; AA Offers $1.1 B JAL

Darlington Musarurwa
04 Dec, 2009
New York City

Japan government is expected to unveil 24 trillion yen stimulus plan and the Bank of Japan will provide 10 trillion yen short term liquidity. TSE asked to pay 10.71 billion yen in damages. American Airlines proposes $1.1 billion offer of JAL.

[R]5:00AM New York, 7:00PM Tokyo - Japan government is expected to unveil 24 trillion yen stimulus plan and the Bank of Japan will provide 10 trillion yen short term liquidity. TSE asked to pay 10.71 billion yen in damages. American Airlines proposes $1.1 billion offer of JAL.[/R]

Japan stocks rose 1.5% and American Air Lines proposal to acquire Japan Airlines for $1.1 billion. Gains were however pared by losses in consumer lenders.

In Tokyo trading Nikkei 225 Index rose 0.5% or 44.92 to 10,022.59, and the broader Topix Index edged up 0.2% to 889,58 and added 9.7% for the week.

In the first section of the Tokyo Stock Exchange11.3 billion shares worth 708 billion yen were traded and in the second section 382 million shares valued at 4 billion yen changed hands.

Of the Nikkei 225 index stocks, 121 rose, 95 dropped, and 9 were unchanged. Japan Airlines led gainers in the index shares with a rise of 8.7% followed by Mitsui Chemicals soaring 6.4%.

Japan to Unveil 24 trillion Yen Stimulus

Kyodo News Agency reported today that Japan will unveil a 24 trillion yen stimulus plan that includes 7.1 trillion yen in actual spending, while the remainder will be in the form on loan guarantees and “other measures.”

According to the report, government spokesperson Hirofumi Hirano the government aimed to conclude the new stimulus spending in a cabinet meeting scheduled today. Separately, the Bank of Japan is providing additional short term liquidity of 10 trillion yen.

The package will be financed through a second supplementary budget for the current fiscal year that ends in March.

Separate reports noted that the package will fund an eco-point reward program for energy-efficiency appliances, extended loan guarantees for small and mid-size businesses and spending to help companies affected by the recession.

TSE to Pay 10.71 billion yen in Damages

Nikkei News reported the Tokyo District Court today ordered the Tokyo Stock Exchange to pay 10.71 billion yen in damages in a lawsuit over Mizuho Securities Co’s erroneous order for J-Com Co.

The report says in December 2005, a trader at the Mizuho Financial Group Inc. placed an order to sell 610,000 J-Com shares for I yen apiece, instead of 610,00 yen per share.

Mizuho however placed a cancellation order.

American Airlines Proposes $1.1 billion Offer for JAL

Japan Today announced today that American Airlines will lead a $1.1 billion investment in Japan Airlines as a counter bid for Delta Air Lines and Sky Team partners.

American Chief Financial Officer Tom Horton said its proposal together with its private equity firm TPG Inc. is part of a restructure meant to rehabilitate the carrier.

American officials indicate that if JAL forms an alliance with them they will apply for anti-trust immunity from U.S. and Japanese regulators, generating $100 million in additional revenue.

Imported Car Sales Rise 4.8% in November

Japan Automobile Importers Association reported sales of imported vehicles gained 4.8% to 14,190 units in November from a year ago on the back of marked declines last year.

Vehicle sales produced by overseas makers soared 3.9% to 12,302 units, while those of Japanese makers manufactured abroad jumped 11.1% to 1,888 units.

Volkswagen sales increased 2.3% to 3,326 units, BMW advanced 14.6% to 2,146 units, but Mercedes-Benz decreased 2.8% to 1,999 units.

Gainers & Losers

Japan Airlines led gainers in the Nikkei 225 index stocks with a rise of 8.7% followed by increases in Mitsui Chemicals of 6.4%, Nippon Yusen of 6.2%, in Taiheiyo Cement of 5.9%, in Toto Ltd. of 5.5%.

Auto makers also increased as imported vehicles sales gained in November and after the yen fell to as low as 88 against the dollar. Mitsubishi Motors jumped 5.2% to 141 yen and Suzuki Motors climbed 4.7% to 2,325 yen.

Nippon Suisan led decliners in the Nikkei 225 index stocks with a fall of 4.2% followed by losses in Nitto Boseki Co. of 3.3%, in Nippon Paper Group pf 3.1%, in Unitika Ltd. of 2.9%, and East Japan Railways of 2.4%.

Inpex Corp. decreased 2.1% to 668,000 yen.