8:30 PM Tokyo – Stocks in Tokyo rebounded in a choppy session after GDP in the last fiscal quarter to March increased 4.1% from a year ago. The GDP declined 0.01% in the fiscal year after exports plunged on supply chain disruptions. Toshiba said it will stop making television sets in Japan as the unit declares a loss.
Stocks in Japan closed higher in a choppy session after GDP rose 1% in the quarter to March from the previous quarter and rose 4.5% from a year ago quarter.
Market sentiment was also fragile after Greek turmoil deepened and the worries in the euro zone spread to Spain and Italy as bond yields rise.
ECB President Mario Draghi increased pressured on Greek leaders to stay in the euro zone but also highlighted the limits of the willingness of the central bank. The bank also said it has stopped working with some undercapitalized Greek banks but left open the access to emergency funding window at a higher interest cost.
Most of the Greek banks have been funding their operations with the access to these short term loans as more depositors withdrew money from the banking system.
Yesterday, Greek President cited data from the Greek central bank and said 700 million euros have left banks on Monday alone and additional 100 million euros are likely to leave before the next election.
Greek central bank said approximately $4 billion have left banking system every month in the years 2010 and 2011 and in the first quarter of 2012 and $6.5 billion were withdrawn last month alone.
Greek president worked for the sixth time in a failed bid to form a unity government. Greeks are expected to vote again on June 17.
The Nikkei 225 Stock Average increased 75.42 to 8,876.59 and the broader Topix index gained 8.28 to 747.16.
GDP Growth Accelerates
GDP in the March quarter increased 1% from the previous quarter after the growth in the December quarter was revised to zero.
Domestic demand drove the expansion as international markets offered few opportunities to exporters for growth.
Consumer spending which accounts for 60% of the GDP increased 1.1% and household spending on durable goods rose after government offered subsidies to purchase environmental friendly vehicles.
New vehicle sales in March surged 78.2% from a year ago to 497,959 units according to the Japan Automobile Association.
Exports in the quarter increased 2.9% and in imports rose 1.9%. For the fiscal year ending in March, GDP decreased 0.01% after rising 3.2% in the fiscal year ending in March 2011.
The decline in GDP in the last fiscal year was largely related to the fall in exports as the nation battled the tsunami and earthquake and supply chain problems linked to Thailand. Japan recorded trade deficit in the last fiscal year of 4.41 trillion yen or $54.9 billion, the first deficit in several decades.
In the current fiscal year, the GDP is expected to grow 2% as the Bank of Japan offered more stimulus in April and domestic consumption and rebuilding efforts provide impetus to the economic expansion.
Sharp Corp advanced 21 yen to 391 yen.
Kansai Electric Power Company, Inc decreased 8 yen to 1,079 yen and Tokyo Electric Power slipped 5 yen to 165 yen.
Toyota Motor soared 45 yen to 3,145 yen and Honda Motor Co. surged 60 yen to 2,660 yen and Nissan Motor Co Ltd gained 25 yen to 777 yen.