Japan has seen some positive movements in its stocks because of the impending elections. Goldman Sachs Group Inc. stated that the Japanese shares should benefit because of the policy changes that the new Government may make after the elections conclude. Incidentally, most of the pre-poll surveys are indicating that opposition Liberal Democratic Party will be victorious.
According to the Goldman Inc. report, the new Government will take policies that will combat the deflation problem of this Asian country. Certain policy changes may also be introduced in parts such as: corporate tax cuts, phasing out of nuclear plans and public works investment. The report also predicted that by end of 2013, the Tokyo Stock Price Index (Abbreviation TOPIX) will reach 930 (It is currently at 779.44). The major Japanese companies are also expected to increase their profits by 20% or more in the next fiscal year which starts from April, 2013. Amid all the favorable news, TOPIX has actually increased by 1% today.
The Nikkei 225 (NKY) Stock Average rebounded after suffering a loss on yesterday. It actually gained approximately 1% and is at 9400.88 currently. Yesterday, it suffered a loss of 1.2%, its biggest within the last 3 weeks.
Among the Japanese companies, All Nippon Airways surged by 4.1% as reports surfaced that it will get 8 new berths at the Haneda Airport of Tokyo. Japan Airlines Co. will also get 3 new berths and the share prices increased by 0.9%. Shikoku Electric Power Co. saw a jump of 2% and that attributed to an overall positivity in the Japanese utilities market. Chubu Electric Power Co. and Chugoku Electric Power Co. – both gained around 3.5% as well.
Nakayama Steel Works Ltd. has seen a huge increase of 55% in its share prices and is presently at 62 yen per share. To pay back the 60 billion Yen of loans, the company officials are negotiating with 5 banks. The company has suffered losses for 3 consecutive years.
Honda Motor Co. share prices rose by 2% thanks to the favorable US news regarding budget deal. More than 40% of its profit, incidentally, comes from North America. Toyota Motor Corp also saw an increase of 1.2%. This is a surprising result as its production in China experienced a fall of 61%.