Japanese Automakers Surge as Yen Falls

Japanese May car sales surge
Japanese May car sales surge

In Asia Thursday Japan's Nikkei 225 Index surged 3.2% to 9,914 and Hong Kong's Hang Seng Index rose 1.6% to 19,787. In China the Shanghai Composite Index slid 0.7% to close at 2,553.

Japanese shares surged as the yen fell to a two-week low against the dollar. Prime Minister Hatoyama's resignation spurred a sell-off of the currency. Akio Yoshino, chief economist at Societe Generale Asset Management told Bloomberg, "When the head of a country passes away or resigns, you sell the currency of that nation." That's good news for exporters since as the yen falls in value, businesses get more yen for the dollars they earn abroad.

Today Nissan is bringing home even more cash as reports show that May sales climbed 24% as compared with last year. Nissan's stock price soared 4.8%. Mazda saw a 5.3% jump, Honda rallied 4.3% and Toyota racked up a 3.6% gain. Isuzu, well known for its pick up trucks, skyrocketed 9.1% and Fuji Heavy Industries, which produces Subaru cars in addition to Boeing airplane parts, climbed 6.0%.

Among electronics makers, Panasonic leaped 4.5% after local papers reported that it will produce 140% more LCD televisions this year. Canon advanced 3.4%, Sharp surged 4.1 and Casio Computer gained 3.2%. Sony rose 2.6% and rival game console maker Nintendo added 1.9%.

Fast Retailing shot up 7.2% on increased sales at Uniqlo shops. The super-successful chain store is due to open a second store in New York sometime next year, taking its place among Fifth Avenue retailers. Its popularity has surged and folks are blogging about it. "It has become my go-to store for ANY clothing needs at reasonable prices and excellent quality," quips Mark on yelp.com.

In Hong Kong, clothing maker Esprit surged 5.9% and Li & Fung, distributor of Asian-made clothing, toys and other products to the likes of Target and Wal-Mart, gained 3.6% on higher hopes for a global recovery.

BYD, Warren Buffett-backed electric car company which stands for "Build Your Dreams," advanced 4.4% after a government incentive program was unveiled that will subsidize the purchase of green cars in five major Chinese cities, paying cash to the carmakers for each electric or hybrid vehicle sold.

Hong Kong banks were also on the rise after reports that the number of mortgages getting approved in the U.K. and Hong Kong is increasing. According to data collected by Bloomberg, the number of homes sold in Hong Kong has fallen compared with last year, while the total amount spent on homes has risen. So fewer people must be buying more expensive homes. HSBC advanced 2% and Standard Chartered rose 1.9%.

In China property developers were hard hit today. Property Wire reports that sales are falling fast. In the major cities of Beijing, Shanghai and Shenzhen sales are down by anywhere from 62% to 70% for May as compared with the month before. Today Gemdale sank 3%, Poly Real Estate slumped 2.9% and China Vanke fell 1.1%. And with possible taxes on the way, buyers have little incentive to plow money into a market that may be about to burst.