Japan Markets Surge on BoJ Speculation

Darlington Musarurwa
05 Mar, 2010
New York City

Stocks in Japan surged on the speculation that the central bank will announce more measure to stimulate the economy next week. Shipping companies surged after a sharp gain in freight rate futures.

[R]5:00 AM New York, 7:00 PM Tokyo – Stocks in Japan surged on the speculation that the central bank will announce more measure to stimulate the economy next week. Shipping companies surged after a sharp gain in freight rate futures.[/R]

Japanese benchmark index rose 2.2% as the yen declined and investors speculated that the Bank of Japan noted that it is considering more monetary easing and may announce new measures soon.

In Tokyo trading Nikkei 225 Stock Average advanced 2.2% or 223.24 to 10,368.96, jumping 2.4% for the week, and the broader Topix Index gained 1.5% to 910.81.

The yen declined to 89.37 from 88.35 at previous close.

In the first section of the Tokyo Stock Exchange 8.5 billion shares valued at 605 billion yen were traded and in the second section 104 million shares worth 1.7 billion yen changed hands.

Of the Nikkei 225 index stocks 212 rose, 7 fell, and 6 were unchanged. Nippon Light Metal led gainers in the index shares with a rise of 9% followed by Marui Group climbing 5.9%.

The Bank of Japan is scheduled to meet for its two two-day meeting and market speculated that additional monetary easing may be discussed. The report from the Nikkei News speculated that the central bank may announce more measures to stimulate the economy.

“I think it is basically a favorable move for the BOJ to make efforts to exit from deflation. I didn''t hear directly from the BOJ. But I gather it is considering the plan partly because I requested that the BOJ take further steps to stem deflation,” said Kan.

Japan’s Imported Sales Rise 16.9% in Feb

Japan’s Automobile Importers Association reported today that new imported vehicle sales in Japan, including cars made abroad, climbed 16.9% to 14,433 units in February from the same period a year ago.

Total sales, excluding Japanese brands, soared 20.4% to 13,041 units, while Japanese brands decreased 8.2%.

Volkswagen sold the most as sales increased 35.1% to 3,882 units and Mercedes-Benz sales followed with the rise of 4.9% to 2,208 units.

Nikkei Movers

Showa Shell Sekiyu K.K. led the decliners in the Nikkei 225 Stock Average with a loss of 0.8% followed by losses in Tokyo Gas Co Ltd of 0.7%, in The Tokyo Electric Power Company, Incorporated of 0.6%, in Nippon Oil Corp 0.2% and in Sumitomo Mitsui Financial Group, Inc 0.1%.

Nippon Light Metal Company, Ltd led gainers in the Nikkei 225 Stock Average with a rise of 9.0% followed by gains in Marui Group Co Ltd 5.8%, in Denki Kagaku Kogyo Kabushiki Kaisha of 5.3% and in Mitsui Chemicals, Inc 4.9%.

Other Movers

Canon Inc added 3.3% to 3,890.00 yen and the electronics products maker increased its stake in Oce NV to 71% and extended its offer for the second time to increase the stake to 85%.

Escrit Inc priced its stock in the initial public offering at 650 yen. The operator of wedding halls and hotels will start trading on Tokyo’s Mothers market today.

H.I.S. Co., Ltd surged 12.8% to 1,840.00 yen after the travel agency was upgraded to “buy” from “neutral” at Nomura Holdings Inc.

Kawasaki Kisen Kaisha, Ltd. advanced 4.8% to 343.00 yen after the shipping line had its rating upgraded to “outperform” from “market perform” at Mitsubishi UFJ Financial Group Inc.

Mitsubishi Electric Corporation climbed 3.8% to 764.00 yen after the maker of electrical equipment was upgraded “overweight” at Morgan Stanley.

Mitsubishi Tanabe Pharma Corporation increased 3.3% to 1,352.00 yen after the drugmaker was upgraded to “buy” from “hold” at Citigroup Global Markets Japan Inc.