Market Updates
Japan Targets 2% Real Economic Growth
Darlington Musarurwa
30 Dec, 2009
New York City
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Japan targets 3% nominal economic growth through 2020 and 2% real growth on higher spending for green technology, tourism and education. Number of companies delist from Tokyo Stock Exchange and Osaka Securities Exchange increase to 160 from 82 a year ago.
[R]5:00 AM New York, 7:00 PM Tokyo - Japan targets 3% nominal economic growth through 2020 and 2% real growth on higher spending for green technology, tourism and education. Number of companies delist from Tokyo Stock Exchange and Osaka Securities Exchange increase to 160 from 82 a year ago.[/R]
Japanese market averages dropped on the fears that Japan Airlines may seek bankruptcy protection.
In Tokyo trading Nikkei 225 Stock Average fell 0.9% or 91.62 to 10,546.44, and the broader Topix Index decreased 0.9% to 907.59, rising 5.6% for the year. Markets will reopen on January 4.
In the first section of the Tokyo Stock Exchange 8.1 billion shares valued at 396 billion yen were traded and in the second section 210 million shares worth 1.6 billion yen changed hands.
Of the Nikkei 225 index stocks, 23 rose, 191 dropped, and 11 were unchanged. Showa Denko KK led gainers in the index shares with a rise of 3.9% followed by Fuji Heavy Industries climbing 3.7%.
Japan Targets 3% Nominal Growth to 2020
Nikkei News reported that an extraordinary Cabinet meeting approved today a new government growth strategy that targets 3% nominal economic growth through 2020.
The real economic expansion in the next decade is expected to 2%. The government is hoping to attract more tourists, develop new industrial zones in Asia and sell green technology and equipment around the world.
The plan is based on increasing demand in environment, health and tourism, including adding 4.76 million jobs, as unemployment is projected to fall to 3% from 5%.
However, economic growth is projected to contract 4.3% for fiscal 2009.
Under the New Growth Strategy, the country’s nominal gross domestic product is expected to soar to 650 trillion yen in 2020 from 473 trillion yen forecasted for fiscal 2009.
The new economic plan is based on the Democratic Party of Japan’s philosophy of focusing on families, household spending and shift away spending from big construction projects and supporting big companies.
In addition, the government intends to generate 100 trillion yen of demand from environment, health and tourism by 2020. Also, the government plans to target next-generation cars technology development and rechargeable batteries.
Japan''s public and private sectors together are expected to spend the equivalent of 4% of GDP or more in science and technology-related research and development projects to help support the nation''s growth.
Details of the plan will be decided in June next year.
Delisting Increase to 160
Japan Today reported that 160 companies delisted from the Tokyo Stock Exchange and Osaka Securities Exchange in 2009 prompted by the combined effect on mergers and acquisitions and bankruptcies.
The eighty two companies delisted from the OSE in 2009, which is the second largest ever.
Also companies reduced their listing to TSE by removing stocks from the OSE to cut costs.
Japan’s Current Account to Top 20 Trillion
Nikkei News separately reported the country’s balance of current accounts deposited at the Bank of Japan is expected to rise to 20.29 trillion yen on Wednesday on the central bank’s efforts to offer additional monetary easing through its introduction of a new type of fund supplying operation earlier this month.
The report notes that funds supplied by the BOJ in the run-up to the year-end will be absorbed in 2010.
Nikkei Movers
Japan Airlines Corporation led the decliners in the Nikkei 225 Stock Average with a loss of 25.0% followed by losses in Shinsei Bank, Limited of 5.6%, in Odakyu Electric Railway Co., Ltd of 4.3%, in J Front Retailing Co Ltd 3.5% and in Nitto Boseki Co Ltd 3.0%.
Showa Denko K.K led gainers in the Nikkei 225 Stock Average with a rise of 3.9% followed by gains in Fuji Heavy Industries Ltd 3.6%, in Hitachi, Ltd of 3.6% and in Mitsubishi Paper Mills Limited of 1.8%.
Other Movers
Japan Airlines Corporation plunged 23.8% to ¥67.00 on the fears that the carrier may end up in bankruptcy that may wipe out current shareholders.
Mitsubishi UFJ Financial Group, Inc decreased 0.4% to ¥452.00 after the listed bank said Sumitomo Mitsui Financial Group Inc. will consider whether to sell more stock after regulators called for tighter capital standards and larger rival Mitsubishi UFJ Financial Group Inc. raised ¥1 trillion or $11 billion.
Mizuho Financial Group, Inc the bank dropped 0.6% to ¥166.
Toyota Motor Corporation the automotive industry fell 0.2% to ¥3,880 and Yamaha Motor Co., Ltd the motorcycle maker slipped 3.0% to ¥1,166.00.
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