Bloomberg News

Japanese Stocks Climb From Three-Month Low as Utilities Advance

June 20, 2011

June 20 (Bloomberg) -- Japanese stocks rose from a three- month low as power companies climbed on signs the government may allow atomic reactors to be restarted following the worst nuclear accident in 25 years.

Chubu Electric Power Co., ordered last month to shut operations at its Hamaoka nuclear plant to address safety concerns, surged 7.9 percent. Mazda Motor Corp. jumped 2.1 percent after the automaker said it will return to profit this year and Citigroup Inc. raised its rating to “hold,” citing a recovery in production after Japan’s March earthquake. Mitsubishi Corp., the country’s largest commodities trader, dropped 0.8 percent after oil prices fell on a decision by European officials to delay money to help Greece avoid default.

The Topix index advanced 0.2 percent to 806.83 at the 3 p.m. close in Tokyo, with almost twice as many stocks advancing as falling, after Trade Minister Banri Kaieda said on June 18 that Japan’s nuclear plants have passed safety checks and reactors shut for maintenance should be restarted on schedule.

“Restarting the nuclear power plants is good for the utilities and, in the end, good for the economy because it means we can avoid power shortages,” said Kenichi Hirano, general manager and strategist at Tachibana Securities Co. in Tokyo. “Still, words don’t settle anything by themselves, so you can’t take it for granted that this will resolve the issue.”

Greek Bailout

The Nikkei 225 Stock Average was little changed at 9,354.32. The gauge fell on June 17 to its lowest since March 18 amid concern European officials would fail to agree on a bailout for debt-saddled Greece.

Power companies had the biggest gain today among the 33 Topix industry groups, with Chubu Electric advancing 7.9 percent to 1,440 yen and Kansai Electric Power Co., Japan’s second- largest utility by sales, rising 7.7 percent to 1,420 yen.

The Topix Electric Power and Gas sub-index has lost 42 percent since March 10, the day before a magnitude-9 earthquake and tsunami devastated Japan’s northeast coast, triggering partial meltdowns at Tokyo Electric Power Co.’s Fukushima Dai- Ichi nuclear plant, causing power shortages and forcing the nation to rethink its reliance on atomic power.

Mazda advanced 2.1 percent to 199 yen. The automaker forecast it will post 1 billion yen ($12.5 million) in net income for the year ending March 31, compared with a loss of 60 billion yen a year earlier. Mazda also said it plans to build a factory in Mexico with the capacity to produce 140,000 cars a year.

Mazda, Olympus Gain

Citigroup analyst Noriyuki Matsushima raised his rating on the carmaker to “hold” from “sell,” saying Mazda’s supply chain has recovered from the earthquake more quickly than expected.

Olympus Corp., an optical-equipment maker, increased 4.3 percent to 2,787 yen and was the biggest single support for the Nikkei. The company said net income will probably jump to 18 billion yen in the year ending March 31 from 7.38 billion yen a year earlier.

Euro-area finance ministers today pushed Greece to pass laws to cut its deficit and sell state assets. They left open whether the country will get the full 12 billion euros ($17.1 billion) promised for July as part of a bailout package agreed last year, according to Luxembourg Prime Minister Jean-Claude Juncker, after chairing a crisis meeting in his country. Decisions on the next payout and a three-year follow-up package were put off until early next month.

Among stocks that fell, commodity-related companies declined after oil and copper prices dropped. Mitsubishi lost 0.8 percent to 1,915 yen. Mitsui & Co., Japan’s second-largest trading company, slid 0.8 percent to 1,277 yen. Inpex Corp., Japan’s biggest energy exploration company, retreated 1.6 percent to 555,000 yen.

Crude oil for July delivery fell as much as 1.7 percent to $91.42 a barrel in electronic trading in New York today. Copper futures dropped as much as 1.2 percent.

--With assistance from Toshiro Hasegawa in Tokyo. Editors: Jason Clenfield, Nick Gentle.

Contact the reporter on this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.


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