Japanese Economy May Stall; Canon Keeps Dividend

Darlington Musarurwa
24 Dec, 2009
New York City

Stocks in Japan traded higher as investors return to buy stocks on the hopes that the U.S. economy is stabilizing. Bank of Japan Governor Shirakawa said that the economy may stall in the second half of the current financial year. Domestic PC shipments rise 4.8% in November.

[R]5:00 AM New York, 7:00 PM Tokyo – Stocks in Japan traded higher as investors return to buy stocks on the hopes that the U.S. economy is stabilizing. Bank of Japan Governor Shirakawa said that the economy may stall in the second half of the current financial year. Domestic PC shipments rise 4.8% in November.[/R]

Japan market averages rose led by commodity stocks as crude oil prices gained 3.1% to $76.70 per barrel and gold prices advanced 0.7% to $1,094.

In Tokyo trading Nikkei 225 Stock Average increased 1.5% or 158.89 to 10,536.92 and the broader Topix Index edged up 1.2% to 913.72.

In the first section of the Tokyo Stock Exchange 9.9 billion shares valued at 723 billion yen were traded and in the second section 177 million shares worth 1.9 billion yen changed hands.

Of the Nikkei 225 index stocks, 167 gained, 45 dropped, and 13 were unchanged. Canon Inc led gainers in the index shares with a rise of 6.1% followed by a rise in Japan Tobacco of 5.2%.

Japan’s Economy to Stall in Spring

Nikkei News reported Bank of Japan Governor Masaaki Shirakawa said today during a lecture in Tokyo the country’s economic recovery might stall in the next three months.

Shirakawa said the pace of recovery might be slow through the middle of fiscal 2010 “as adjustment pressure on capital spending and employment will remain.”

The report notes that the consumer price index is narrowing its margin of decline, but the downward price pressure is projected to continue for an extended period should the recovery remain sluggish.

“Around spring of the coming year, when the effects of the various economic policy measures implemented at home and abroad are expected to recede, I must say there is the possibility that economic momentum will briefly decelerate,” said Shirakawa.

Domestic PC Shipments Rise 4.8%

Separately, the online edition reported that Japan Electronics and Information Technology Industries said domestic shipments of personal computers gained 4.8% to 673,000 units in November from the same period a year ago.

PCs with Microsoft Corp.''s Windows 7 operating system, which was released in October, were in high demand among retail customers.

In addition, desktop shipments advanced 9.1% to 202,000 units, while notebook shipments gained 3% to 470,000 units.

In value terms, PC shipments fell 9% to 65.7 billion yen in the period.

Nikkei Movers

Shinsei Bank, Limited led the decliners in the Nikkei 225 Stock Average index with a loss of 3.6% followed by losses in Nippon Express Co., Ltd of 2.1%, in Japan Airlines Corporation of 1.9%, in Tokyu Land Coporation 1.9% and in Secom Co Ltd 1.7%.

Canon Inc led gainers in the Nikkei 225 Stock Average index with a rise of 6.0% followed by gains in Japan Tobacco Inc 5.1%, in Advantest Corporation of 5.1% and in Sumitomo Metal Industries, Ltd of 5.0%.

Other Movers

Canon Inc advanced 6.1% to ¥4,020.00 after the company left its annual dividend at 100 yen. The company launched a bid to buy 100% of shares in Polish listed ophthalmology company Optopol Technology SA, according to BZ WBK brokerage.

Cannon wants to buy up to 6.54 million shares in Optopol Technology SA at 20 zlotys or $6.9 a share and has already agreed to buy 7.66 million shares at 19 zloty per share from the Bogdani family, according to Dow Jones.

Cannon also received European Union approval to acquire Holland based OCE NV.

Elpida Memory, Inc the computer-memory maker rose 6.7% to ¥1,481.00.

Itochu Corporation the trading company gained 4.0% to ¥688.00.

Inpex Holdings Inc the oil explorer rose 1.1% to ¥702,000.00.

Mitsubishi Corporation increased 5.0% to ¥2,290.00 after a rally in energy and metals prices.

Shin-Etsu Chemical Co., Ltd the maker of silicon wafers added 3.5% to ¥5,280.00.

Tokyo Electron Limited the maker of equipment to manufacture semiconductors climbed 4.3% to ¥5,980.00.