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August 9, 2005    

Investor confidence strong in Japan despite political upheaval

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by Brian Turner
Investor confidence strong in Japan despite political upheaval

Political upheaval did not seem to dampen investors’ confidence in Tokyo on Tuesday after post office privatization was voted down by the upper house of parliament on Monday. The Nikkei 225 closed up 1 percent to 11,900.32 and the Topix index gained 1.2 percent to end the session at 1,206.27.

Most analysts seemed to minimize the impact of the vote and the fact that the ruling Liberal Democratic Party might lose power in snap elections scheduled for September 11.

The predominant opinion seems to be that Japan’s current economic recovery is stable enough that it will not be disturbed by the political uncertainty inherent in the upcoming elections. Oil stocks rose on higher crude oil prices.

Nippon Oil gained 2.1 percent to ¥812. Good quarterly reports translated into gains in share prices for camera manufacturer Nikon and nonferrous metal smelter Mitsubishi Materials. Mitsubishi reported a 31 percent rise in quarterly net profits due to high copper prices.

Nikon more than quadrupled its operating profit in the quarter on sales of high-end digital cameras, which spurred it to raise its full-year earnings predictions by 9 percent. This news helped Nikon’s shares to advance by 3.8 percent to ¥1,296.

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