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Market Update

Tokyo Leads Asian Rally, Fast Retailing Net Surges 26%

Author: Hiruki Nakamura
Last Update: 10:45 AM ET October 11 2013

4:35 PM Tokyo Stocks in Tokyo and in Asian markets closed higher following a rise in New York trading. The yen weakened. The Nikkei gained the most in three months. Fast Retailing dropped 3% after it estimated lower than expected fiscal year net income.

Investors bid up stocks in Tokyo and in Asia as investors focused on the latest development in U.S. political negotiations as a progress. The yen weakened.

The U.S. fiscal standoff has forced most of the federal government to shut down and the U.S. creditworthiness is under a closer scrutiny from world investors.

Investors are increasingly concerned that the financial markets calm in the U.S. is offering no leverage over political process and not prompting leaders to settle the budget and debt ceiling revisions disputes.

The U.S. is the largest debtor nation in the world with $16.7 trillion and the government is scheduled to run out of money as early as October 17.

The U.S. government received $250 billion in monthly revenues and about $25 billion of that has to be paid out in interests. However, the government also spends as much as $80 billion more each moth than it receives and that will force the government to prioritize on its payment.

While, the government can pay interest payment from its daily receipts but rescheduling other payments will be deemed by most investors as nothing but a default and it will also force government to delay and then curtail several other expenses that could throw the economy into a recession as deep as in 2007-09.

The Nikkei 225 Stock Average gained 1.5% to 14,404.74 and the Topix index advanced 1.6% to 1,197.17.

The yen declined 0.2% to 98.40 against one dollar and fell 0.4% to 133.15 against one euro.

In Asian trading, market indexes advanced following a rise in New York.

Hang Seng index in Hong Kong increased 1.16%, Sensex index in Mumbai gained 1.26% and market indexes in Jakarta and Seoul added more than 1%.

Stocks in Review

Weaker yen lifted stocks of electronics exporters and automakers.

Panasonic Corp increased 2.8% to 955 yen and Sony Corp gained 20 yen to 1,919 yen. Canon Inc declined 0.3% to 3,115 yen and Olympus Corp added 2.1% to 3,120 yen.

Toyota Motor Corp added 0.6% to 6,410 yen and Nissan Motor Co gained 1.3% to 1,009 yen. Honda Motor Co Ltd increased 0.7% to 3,915 yen.

Broccoli Co soared 27% to 381 yen after the computer game developer said first-half net income soared 157%.

Matsuya Co added 5.6% to 1,276 yen after the department store retailer lifted its net income estimate 43% to 1 billion yen or just over $10 million.

Fast Retailing Co. declined 3% to 33,450 yen after the company said its annual net income in the year ending August 2014 is expected to be 92 billion yen or $935 million.

In the latest year, sales increased 23% to 1.143 trillion yen and net income rose 26% to 90.4 billion yen. The retailer said it plans to open between 200 and 300 stores in overseas markets annually and plans to open its first stores in Australia and Germany in spring 2014.

Nippon Express Co increased 3.5% to 497 yen after a report in Nikkei newspaper said that operating profit in the first-half increased 10% to 17 billion yen as domestic demand rose for the freight transport company.

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