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Tokyo shares up ahead of Nissan-Mitsubishi tie-up

Tokyo shares up ahead of Nissan-Mitsubishi tie-up

TOKYO: Tokyo stocks rose on Thursday as a weaker yen boosted the outlook for exporters’ profits, while investors focused on a deal by Nissan to throw a lifeline to scandal-hit Mitsubishi Motors.

Mitsubishi surged 16.16 percent to 575 yen after Nissan confirmed that it was in capital tie-up talks with the firm, which plunged into crisis after bombshell revelations it cheated on fuel-economy tests for years.

Yokohama-based Nissan confirmed after the market closed that it would buy a 34 percent stake in Mitsubishi, with the deal valued at about $2.2 billion according to a regulatory filing.

Mitsubishi admitted last month that unnamed employees had manipulated data to make cars seems more fuel-efficient than they actually were.

The scandal reported to cover almost every model sold in Japan since 1991 also includes mini-cars produced by Mitsubishi for Nissan as part of a joint venture.

Nissan fell 1.44 percent to finish at 988.1 yen before formally announcing the Mitsubishi deal as well as its full-year earnings.

The benchmark Nikkei 225 index, which opened lower, rose 0.41 percent, or 67.33 points, to close at 16,646.34, while the broader Topix index of all first-section shares gained 0.22 percent, or 2.97 points, to 1,337.27.

Japanese exporters were lifted by a weaker yen, a plus for their profitability as it tends to spur demand for their shares.

The dollar rose to 108.89 yen from 108.39 yen on Wednesday in New York.

“The yen trading close to 109 per dollar is a big help,” Hiroaki Hiwada, a strategist at Toyo Securities, told Bloomberg News.

“Investors are being cheered on by some of the earnings that came out in the afternoon.”

Toshiba gained 0.91 percent to 222.9 yen after it announced that it suffered a $4.4 billion full-year net loss as the troubled conglomerate booked a massive write-down of its US nuclear unit.

But the company also said it would return to the black for the year to March 2017, projecting a net profit of 100 billion yen.

Toyota dropped 1.43 percent to 5,553 yen a day after it warned its annual profit is set to fall by about a third.

The world’s biggest automaker on Wednesday tipped a 1.5 trillion yen ($13.8 billion) net profit for the year to March 2017, a surprise new forecast that would mark its first decline in five years.

Sharp, which agreed to be bought by Taiwan’s Hon Hai in March, lost 0.76 percent to 130 yen before it released full-year earnings.

Sony, meanwhile, soared 4.40 percent to 2,850 yen while Uniqlo operator Fast Retailing, a market heavyweight, rose 0.94 percent to 29,020 yen.

Copyright AFP (Agence France-Presse), 2016

Courtesy : BRecorder



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