Tokyo Stocks Advance; Auto Sales Surges 35%

Darlington Musarurwa
01 Mar, 2010
New York City

New car sales in Japan surges 35.1% in February. Finance Minister Kano told lawmakers that he wants prices to rise by the end of the year and hopes that aggregate demand will improve.

[R]5:00 AM New York, 7:00 PM Tokyo - New car sales in Japan surges 35.1% in February. Finance Minister Kano told lawmakers that he wants prices to rise by the end of the year and hopes that aggregate demand will improve.[/R]

Japan market averages closed higher after commodities and resource stocks rallied. New car sales in February surged 35%.

Gold prices edged up 0.9% to $111.8 per ounce and crude oil prices increased 0.7% to $80.2 per barrel.

In Tokyo trading Nikkei 225 Stock Average increased 0.5% or 46.03 to 10,172.06, and the broader Topix Index advanced 0.5% to $898.93.

In the first section of the Tokyo Stock Exchange 7.3 billion shares valued at 453 billion yen were traded and in the second section 103 million shares worth 1.3 billion yen changed hands.

Of the Nikkei 225 index stocks, 150 rose, 60 decreased, and 15 were unchanged. Furukawa Co. Ltd. led gainers in the index shares with a rise of 5.1% followed by OKI Electric Industries climbing 4.4%.

New Car Sales Rise 35.1%

Japan Automobile Dealers Association reported today that sales on new vehicles, cars and trucks, increased 35.1% to 294,887 units in February from the same period a year ago, gaining for the seventh straight month.

Passenger car sales advanced 39.2% to 270,389 units as sales of standard-size models edged up 72.2% to 131,548 units and compact vehicles rising 17.8% to 138,841 units.

Truck sales increased 2.4% to 7,538 units.

Japan’s FM Wants Deflation to End This Year

Nikkei News reported that Japan’s Finance Minister that Naoto Kan said today in a parliament session he wants the consumer price index to turn positive this year.

However, Bank of Japan forecasts that prices will remain negative through the fiscal year ending March 2012.

Kan noted that the government and Bank of Japan should target a CPI rate of one percent or higher.

Also Japan’s banking minister Shizuka Kamei said the gap between insufficient demand and excess supply in the economy- projected to be around 35 trillion yen- shows that BoJ’s monetary policy isn’t powerful enough to end deflation.

“The BOJ shares the view that ending deflation is a critical agenda for the Japanese economy” and added further, “we have made it clear that the bank will maintain a very easy policy,” said Bank of Japan Governor Masaaki Shirakawa in the same parliament session.

Toyoda Meets Press in Beijing

Toyota Motor Corp. President Akio Toyoda was today expected to give a press conference in Beijing to explain the company’s vehicle recall in the world’s largest automotive market.

In January, Toyota announced a recall of 75,000 units of the RAV4 SUV’s manufactured and sold in China due to potentially defective accelerator pedals.

Nikkei Movers

Taiheiyo Cement Corporation led the decliners in the Nikkei 225 Stock Average with a loss of 3.4% followed by losses in The Bank of Yokohama, Ltd of 2.9%, in Sumitomo Osaka Cement Co., Ltd of 2.6%, in Clarion Co Ltd 2.5% and in Ngk Insulators Ltd 2.3%.

Fukukawa Co Ltd led gainers in the Nikkei 225 Stock Average with a rise of 5.0% followed by gains in Oki Electric Industry Company, Limited 4.4%, in Okuma Corp of 3 6% and in Mizuho Financial Group, Inc 3.4%.

Other Movers

Honda Motor Co., Ltd closed unchanged at 3,080 yen after the company lead vehicle sales in February.

Mitsubishi UFJ Financial Group, Inc rose 1.5% to 456 yen.

Sumitomo Metal Mining Co., Ltd rose 1.1% to 1,276.00 yen after the producer of the metal announced that it has taken 70% stake in Sumiko Solomon Exploration Co., Ltd. JOGMEC holds a 30% stake in the company.

Unicharm Corporation which makes sanitary and baby products rose 0.1% to 8,530 yen.