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Market Update

Nikkei Soars 3.8%, Yen Drops on Shirakawa Early Departure

Author: Hiruki Nakamura
Last Update: 8:48 AM ET February 06 2013

5:00 PM Tokyo – Stocks and market indexes in Tokyo soared after the BOJ Governor Shirakawa announced his departure ahead of schedule. The yen dropped to a new low in the year and the Nikkei staged a sharpest single-day rally in two years and lifted the Nikkei to a 4-year high.

Stocks in Tokyo escalated the recent gains to new highs and registered the largest single-day gain since March 2011.

The yen dropped to a new recent low of 94.08 against one dollar after the Bank of Japan Governor Masaaki Shirakawa announced that he will step down on March 19 along with two other deputy governors. Shirakawa’s five-year term is ending in April.

The early departure paves way for the newly elected prime minister to implement more aggressive monetary policy and demand higher inflation target from the central bank. The yen depreciated and dropped 16% in the last three months.

The Nikkei index soared to a 4-year high on the prospects of rising earnings in the yen on weaker currency. Exporters led the rally however the steep decline in the currency is likely to lead currency war in Asia that could backfire.

The Nikkei 225 Stock Average climbed 416.83 or 3.8% to 11,463.75 and the broader Topix Index jumped 29.12 or 3.1% to 968.82. The Nikkei jumped to a 4-year high.

The yen edged lower to 93.20 against one dollar at close.

Stocks in Review

Exporters led the rally and automakers, electronics suppliers, shipping companies and banks were in focus.

Japan Airlines Co increased 40 yen to 4,050 yen. GS Yuasa added 5 yen to 336 yen, IHI soared 14 yen or 6.1% to 245 yen and Fuji Heavy Industries surged 67 yen or 5.1% to 1,371 yen. All Nippon Airways Co closed unchanged at 184 yen.

Toyota Motor Corp. climbed 275 yen or 6.1% to 4,815 yen and Honda Motor Co. jumped 115 yen to 3,580 yen and Nissan Motor Co Ltd advanced 41 yen or 4.3% to 996 yen. Mazda Motor Corp increased 12 yen or 4.4% to 283 yen.

Nippon Steel gained 10 yen to 277 yen and JFE Holdings Inc rose 65 yen to 2,116 yen.

Fujikura added 5 yen to 271 yen after the cable maker cut its full year profit outlook to breakeven from the earlier estimate of 2 billion yen.

Shimano Inc increased 110 yen to 6,190 yen.

Canon Inc gained 95 yen to 3,415 yen and Nikon advanced 48 yen to 2,639 yen. TDK Corp climbed 80 yen to 3,270 yen.

Nintendo Co. Ltd jumped 90 yen to 8,800 yen and Pioneer Corp. added 1 yen to 248 yen.

Fanuc Corp. advanced 360 yen to 14,610 yen and Komatsu Ltd gained 74 yen to 2,495 yen. Hitachi Construction Machinery Co increased 73 yen to 2,230 yen.

Softbank Corp climbed 135 yen to 3,515 yen.

FamilyMart Co Ltd, the convenience chain operator rose 50 yen to 3,745 yen and Lawson gained 90 yen to 6,940 yen. Ito En Ltd increased 46 yen to 1,797 yen.

Seven & I Holdings Co added 19 yen to 2,819 yen. Fast Retailing Co. jumped 970 yen or 4% to 25,200 yen and J. Front Retailing Co. Ltd climbed 25 yen or 4.9% to 527 yen.

Mitsubishi UFJ Financial Group rose 13 yen to 533 yen and Sumitomo Mitsui Financial Group increased 70 yen to 3,830 yen. Dai-Ichi Life gained 2.3% to 135,600 yen. Nomura Holdings, Inc added 3 yen to 517 yen.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc