Tokyo Stocks Rise; Iron Ore Price Hike

Mayank Mehta
11 Mar, 2010
New York City

Cabinet Office revised the estimate of the last quarter gross domestic product lower to 3.8% from 4.6%. However, the current quarter estimates may be revised higher after Chinese production accelerated in February. Japanese steelmakers are bracing for 90% increase in iron ore prices from Brazil.

[R]9:00 PM Tokyo, Japan – Cabinet Office revised the estimate of the last quarter gross domestic product lower to 3.8% from 4.6%. However, the current quarter estimates may be revised higher after Chinese production accelerated in February. Japanese steelmakers are bracing for 90% increase in iron ore prices from Brazil.[/R]

Stocks in Tokyo advanced on the global economic optimism after China reported industrial production and inflation gained in February. Shipping and trading companies led gainers.

The Cabinet Office revised gross domestic product estimate lower for the fourth quarter to 3.8% from the preliminary estimate of 4.6%. However, private economists also talked about revising the estimate higher for the current quarter after China reported accelerated production.

The Nikkei 225 Index in Tokyo closed higher 101.03 or 0.96% to 10,664.95 and of the stocks in Nikkei 225 Stock Average, 177 increased, 35 declined and 13 was unchanged.

Mitusi and Itochu, the stake holders in Brazilian iron ore mining giant Vale after Nikkei News reported that the miner is looking to increase prices by 90% for the shipment beginning April.

Recently steel companies agree to a 55% price increase with shipments from Australia based mines controlled by BHP Billiton.

Nikkei Movers

Shinsei Bank, Limited led the decliners in the Nikkei 225 Stock Average with a loss of 3.8% followed by losses in Fuji Electric Holdings Co., Ltd of 2.0%, in Kobe Steel, Ltd of 1.6%, in Nitto Boseki Co 1.5% and in Unitika Ltd 1.3%.

Hitachi Zosen Corporation led gainers in the Nikkei 225 Stock Average with a rise of 6.3% followed by gains in Nippon Light Metal Company, Ltd 5.8%, in OKUMA Corporation of 5.8% and in Sumitomo Heavy Industries Ltd 4.8%.

Other Movers

Canon Inc rose 0.7% to 2,049.00 yen.

East Japan Railway Co gained 0.65% to 6,130 yen after it completed the sale of 10-year bonds to raise 15 billion yen rated by Moody’s Investor Services as Aa1. The bonds yield b basis points more than the Japanese government bonds of similar maturity. The news was first report by Reuters.

The talks of higher iron ore prices lifted stocks of trading and shipping companies.

Itochu Corporation the trading company added 2.2% to 780.00 yen. Mitsui O.S.K. Lines, Ltd the operator of iron-ore ships added 1.3% to 617.00 yen.

Yamada Denki Co the electric retailer advanced 4.0% to 6,490.00 yen.