Nikkei Soars 2.7% Tracking World Markets

Darlington Musarurwa
17 Feb, 2010
New York City

The benchmark index in Japan soared 2.7% following the gains in New York and Europe. Automakers, steel mills and shipping companies led the advance. Toyota may recall Corolla is power steering is found defective.

[R]8:00 PM Tokyo, Japan – The benchmark index in Japan soared 2.7% following the gains in New York and Europe. Automakers, steel mills and shipping companies led the advance. Toyota may recall Corolla is power steering is found defective.[/R]

Stocks in Japan surged following overnight gains in indexes in New York and Europe.

Better than expected economic expansion in the New York region lifted sentiment in Tokyo trading. Commodities surged on the speculation of faster economic recovery. In London, Barclays reported a surge in earnings on the gains in its asset management division.

The Nikkei 225 Index in Tokyo closed higher 272.58 or 2.72% to 10,306.83 and of the stocks in Nikkei 225 Stock Average, 216 increased, 5 declined and 4 was unchanged.

Trading companies, shippers and automakers gained in Tokyo trading. Mitsubishi Corp, Honda Motor Co. and Cannon Inc gained near 4%.

Mitsui OSK and NSK Ltd soared 5% after the freight rate index in London increased after declining for five days in a row.

Freight rates are expected to rise after port delays in China, Australia and Brazil have nearly doubled to between nine and fifteen days in January from a year ago according to a survey conducted by 123jump.com of thirty shipping companies.

Steelmakers advanced on the expectations of speedier recovering in the Asian markets and comments from Goldman Sachs. JFE Holdings Inc increased 5.3% and Japan Steel Works Ltd soared 6%.

Demand for Services Fall 0.9% in December

Ministry of Economy, Trade and Industry reported today that the indices of Tertiary Industry Activity fell 0.9% to 95.8 in December from a year ago.

Industries that contributed decrease were wholesale and retail trade 1.3%; scientific research, professional and technical services 4.4%; miscellaneous services 3.1%; real estate and goods rental and leasing 0.9%; finance and insurance 0.3%; transport and postal services 0.2% and compound services dropped 2.4%.

METI noted that industries that contributed to the increase were accommodation, drinking and eating services 2.3%; living-related and personal services and amusement services 1.2%; information and communications 0.5%; medical, healthcare and welfare 0.1% and learning support 0.6%.

Industries estimated to have no growth included electricity, gas, heat supply and water.

Japan Holds U.S Securities Worth $768 billion

U.S. Treasury Department reported yesterday that the amount of U.S. securities held by Japan rose to $768 billion in December, an increase of $11.5 billion from November.

China’s holdings of U.S. securities fell $34.2 billion to $755 billion.

Nikkei Movers

Nippon Paper Group, Inc led the decliners in the Nikkei 225 Stock Average with a loss of 1.0% followed by losses in Mitsubishi Paper Mills Limited of 0.9%, in Taiheiyo Cement Corp of 0.9%, in Oji Paper Co Ltd 0.2% and in SKY Perfect JSAT Holdings Inc 0.2%.

Pacific Metals Co., Ltd led gainers in the Nikkei 225 Stock Average with a rise of 8.0% followed by gains in Taiyo Yuden Co., Ltd 7.2%, in Kajima Corp of 7.0% and in Toshiba Corp of 6.3%.

Other Movers

Mitsui O.S.K. Lines, Ltd added 5.0% to ¥584.00 after the shipping line was upgraded to “strong outperform” from “outperform” at Mitsubishi UFJ Financial Group Inc.

Pacific Metals Co., Ltd gained 8.0% to ¥660.00 after the stainless-steel maker was upgraded to “outperform” from “underperform” at Macquarie Group Ltd.

Secured Capital Japan Co., Ltd the asset management company fell 8.5% to ¥82,300.00.

Toa Oil Co the consignment-based oil refiner fell 5.4% to ¥86.00.

Toyota Motor Corp closed unchanged at ¥3,380 and the President Akio Toyoda said to reporters in Tokyo that he has not decided if he will testify before the U.S. Congress for a hearing scheduled to investigate the recall.

Toyoda was invited to a hearing on Feb 24 and Yoshimi Inaba, North American president will attend the hearing.

Executive Vice President Shinichi Sasaki said to reporters that the company is reviewing the power steering of the small car model Corolla and may recall if defects are found.

Toabo Corporation fell 2.9% to ¥65.00 after the maker of woolen yarns and fabrics announced that it has cancelled its year-end dividend forecast of zero to -¥2 per share, for the fiscal year ended December 2009.

Toshiba Corp the atomic plant builder rose 6.3% to ¥454.00.