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Japanese Market Rallies

1/10/2013 9:28 PM ET

The Japanese stock market opened sharply higher on Friday with investors going on a buying spree, buoyed by the cabinet approval for an economic stimulus, a stronger U.S. dollar and some upbeat economic data from China. The overnight positive close on Wall Street too aided sentiment to a significant extent.

Automobile, chemicals, steel, non-ferrous metals, financial and precision instruments are mostly up with strong gains. Foods, electric power and retail stocks are trading mixed.

The benchmark Nikkei 225 index, which rose to 10,830.4 in early trades, is currently up 127 points or 1.2 percent at 10,779.6.

Sharp Corp., the biggest gainer in the Nikkei index, is up nearly 10 percent. Tokyo Electric Power is trading 6.3 percent up and Yokogawa Electric Corp. is up almost 6 percent.

Mitsui Engineering & Shipbuilding, Dentsu Inc., Casio Computer, Tokio Marine, Astellas Pharma, Konica Minolta Holdings, T&D Holdings, MS&AD Insurance and Olympus Corp. are trading higher by 4 to 5 percent.

Fast Retailing, JFE Holdings, Panasonic Corp. (PC), Mitsubishi Heavy Industries, Mitsui OSK Lines, Showa Denko KK, Daikin Industries, Fujifilm Holdings and Dainippon Screen Manufacturing are also trading sharply higher.

Automobile stocks Mazda Motor, Nissan Motor, Suzuki Motor and Toyota Motor (TM) and banking stocks Mizuho Financial (MFG), Mitsubishi UFJ Financial (MTU), Sumitomo Mitsui Financial Group and Chiba Bank are up 1 to 3 percent.

Meanwhile, KDDI Corp., Toyobo Co., Tokai Carbon, Fujikura, Mitsubishi Motors and Kobe Steel are trading in negative territory, losing 1 to 2 percent.

On the economic front, Japan posted a current account deficit of 222.4 billion yen in November, the Ministry of Finance said on Friday - marking the first shortfall in 10 months and adding to the case for additional stimulus. The headline figure was well shy of forecasts for a shortfall of 17.1 billion yen following the 376.9 billion yen surplus in October.

The trade balance reflected a deficit of 847.5 billion yen - also missing expectations for a deficit of 832.0 billion yen after showing a shortfall of 450.3 billion yen in the previous month.

Exports were down 4.2 percent on year to 4,778.9 billion yen after showing 4,946.6 billion yen a month earlier. Imports added an annual 0.8 percent to 5,626.3 billion yen after coming in at 5,396.9 billion yen in October.

The adjusted current account saw a surplus of 225.9 billion yen, missing expectations for a surplus of 277.4 billion yen after coming in at 414.1 billion in the previous month.

Meanwhile, overall bank lending in Japan was up 1.4 percent on year in December at 401.279 trillion yen, the Bank of Japan said. That topped forecasts for an increase of 1.1 percent following the downwardly revised 1.2 percent gain in November (originally 1.3 percent).

In the currency market, the U.S. dollar traded about 89 yen level in early deals in Tokyo. The yen is currently trading at 88.94 to the dollar.

Among other markets in the Asia-Pacific region, Hong Kong, Indonesia, New Zealand and Taiwan are up with modest gains. Shanghai and Malaysia are trading flat, while Australia, Singapore and South Korea are trading weak.

On Wall Street, stocks ended higher on Thursday, thanks largely to upbeat trade data from China. While the Dow rose 80.7 points or 0.6 percent to 13,471.2, the Nasdaq climbed 16 points or 0.5 percent to 3,121.8 and the S&P 500 advanced 11.1 points or 0.8 percent to 1,472.1.

Major European markets turned in a mixed performance on Thursday. While the U.K.'s FTSE 100 index edged up 0.1 percent, the German DAX index and the French CAC 40 index declined by 0.2 percent and 0.4 percent, respectively.

U.S. crude oil ended higher on Thursday, with strong Chinese trade data aiding its surge. Crude for February delivery ended up 72 cents at $93.82 a barrel on the New York Mercantile Exchange.

by RTT Staff Writer

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