Tokyo markets gain despite scandals in two sectors

In the Tokyo equities markets on Monday, the Nikkei 225 ended the trading session at 17,424.18, a gain of 0.7 percent to its highest close in nine months. Meanwhile, the Topix index added 0.9 percent to 1,730.33.

Two corporations dropped significantly due to scandals. Construction company Obayashi dropped 5.3 percent to ¥750 after a raid by government prosecutors due to accusations that it was one of several companies suspected to engaging in bids-rigging in connection with an extension of the underground rail system in Nagoya. The construction sector as a whole was weathering the scandal fairly well, however, falling just 0.4 percent on the session.

In the other scandal, bookseller Maruzen was 8.4 percent lower to ¥197 after it said it would have to report an extraordinary loss of ¥800 million this year to compensate for several years of bookkeeping irregularities.

The pharmaceuticals sector added 1.2 percent as a whole as investors continued to hope for more consolidation in the sector after last week’s announcement that Tanabe Seiyaku and Mitsubishi Pharma, a division of Mitsubishi Chemical were in talks toward a merger. Results were mixed within the sector however, with Mitsubishi Pharma adding 0.7 percent to ¥813 but Tanabe down 0.1 percent to ¥1,671.

Banks were helped by news from consumer credit company Aiful that it will cut approximately 1,300 jobs and reduce the size of its branch network by half. The banking sector was 2.2 percent higher as a whole, with Mitsubishi UFJ adding 2.6 percent to ¥1,550,000. Aiful ended the session up by just 0.2 percent to ¥4,030.

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