Exporters, Automakers in Tokyo Gain on Lower Yen

Darlington Musarurwa
08 Jan, 2010
New York City

Finance minister comments supporting lower yen lifted stocks of exporters and auto makers. Japan foreign reserve assets falls to $1 trillion. Japanese government is likely to restructure JAL through a court-backed bankruptcy. Toyota Prius sales topped industry sales in 2009.

[R]5:00AM New York, 7:00PM Tokyo – Finance minister comments supporting lower yen lifted stocks of exporters and auto makers. Japan foreign reserve assets falls to $1 trillion. Japanese government is likely to restructure JAL through a court-backed bankruptcy. Toyota Prius sales topped industry sales in 2009.[/R]

Stocks in Tokyo gained after new finance minister Kan supported lower yen. Automakers and electronics exporters gained. Kan said that the government is prepared to intervene in the market if needed.

The yen weakened to as low as 93.77 against the dollar compared with 92.20 at the close of trading yesterday.

Statistics from JADA showing that the Toyota Prius 1 was the best-selling car in 2009 also added impetus to market gains.

In Tokyo trading the Nikkei 225 Stock Average rose 1.1% or 116.66 to 10,798.32, gaining 2.4% for the week, and the broader Topix Index advanced 1% or 944.29, soaring 3.7% for the week.

The benchmark stock index gained for five business days in a row for the first time since 1994.

In the first section of the Tokyo Stock Exchange 13.5 billion shares valued at 1 trillion yen were traded and in the second section 170 million shares worth 1.9 billion yen changed hands.

Of the Nikkei 225 index stocks, 165 rose, 54 fell, and 6 were unchanged. Isuzu Motors led gainers in the index shares with a rise of 9.1% followed by Mazda Motor Corp. increasing 7.4%.

Hino Motors jumped 5.4% to 333 yen and Honda rose 3.1% to 3,185 yen.

Kan to Intervene in Currency Markets

Japan’s new finance minister Naoto Kan said at a press conference today a weaker yen was preferable for the country’s economy, adding government is prepared to intervene “in the market if necessary.”

He, however, acknowledged that markets are responsible for determining exchange rates.

The report notes that the finance minister said his recent remarks on currency issues have not adversely affected the Japanese business community.

Japan’s Reserves Fall to $1 Trillion in December

Japan’s Ministry of Finance reported that the country’s reserve assets decreased by $24 billion from November to $1 trillion in December, dropping for the first time in six months.

Foreign reserve assets stood at $996.6 billion, while the International Monetary Fund reserve position was at $4.3 billion. Special Drawing Rights were $20 billion, gold $27 billion and other reserve assets $403 million.

Japan to Rehabilitate JAL Court Bankruptcy

Japan Today reported government intends to turnaround Japan Airlines Corp through a court-backed bankruptcy and keep the process transparent. The bailout package is expected to be announced later this month.

However, transport minister Seiji Maehara has denied government has decided on the bankruptcy option.

Under the country’s Corporate Rehabilitation Law, even if JAL seeks bankruptcy protection, government is still expected to work with key creditor banks to ensure the carrier is able to finance daily business transactions.

JAL and its three creditor banks- Sumitomo Mitsui Banking Corp., Bank of Tokyo-Mitsubishi UFJ and Mizuho Corporate Bank-are opposed to the bankruptcy option.

Prius 1 Tops Japan’s Annual Sales

Japan Automobile Dealers Association reported today gas-electric hybrid Toyota Prius 1 was the top selling car in Japan at 208,876 units, reflecting a three-fold increase from the previous year.

Honda’s Fit and the Toyota Vitz were the second and third best selling cars, respectively.

The Prius has been the top-selling car in Japan every month from May last year.

Nikkei Movers

Japan Airlines Corporation led the decliners in the Nikkei 225 Stock Average with a loss of 12.8% followed by losses in NTT Data Corporation of 2.8%, in Jgc Corp of 2.4%, in Dainippon Sumitomo Pharma Co., Ltd 2.2% and in Inpex Holdings Inc 2.1%.

Isuzu Motors Limited led gainers in the Nikkei 225 Stock Average with a rise of 9.0% followed by gains in Mazda Motor Corporation 7.4%, in Kajima Corp of 6.8% and in Obayashi Corporation of 6.6%.

Other Movers

Fujifilm Holdings Corp increased 3.0% to ¥2,956.00 after the maker of film used in liquid-crystal- display panels was rating upgraded to “buy” from “neutral” at Goldman Sachs Group Inc.

Fuji Heavy Industries Ltd rose 3.7% to ¥469.00 after the maker of Subaru cars announced a record-breaking sales year, with customers purchasing 216,652 vehicles in 2009 an increase of 15% over last year and an improvement over the previous record of 200,703 vehicles sold in 2006.

Japan Airlines Corporation plunged 11.8% to ¥67.00 after the media reports suggested that the Japanese government prefers to restructure the carrier in bankruptcy court.

Mazda Motor Corporation climbed 7.4% to ¥231.00 after the car exporter December 2009 sales of 18,255, up 1.6% from a year ago. 2009 sales declined 21.3% to 207,767.

NEC Electronics Corporation the chipmaker gained 2.6% to ¥767.00.

Nissha Printing Co dropped 4.0% to ¥4,410.00 after the electronic-components maker was downgraded to “neutral” from “buy” at Merrill Lynch & Co.

Sony Corporation advanced 2.4% to ¥2,809.00 after the company signed an agreement to sell the measurement hardware businesses to Mori Seiki Co., Ltd. at the price of ¥6 billion, effective late March 2010.

Toshiba Corporation the maker of flash memory climbed 3.4% to ¥538.00.

Toyota Motor Corporation added 2.8% to ¥3,960.00 and the carmaker said Friday it has replaced the top executive of its South Korean unit after sales of Lexus brands dropped last year in Asia''s fourth-largest economy.