Japan's Nikkei index hits six-year high

Tokyo stock exchange screens Investor morale has been boosted by hopes of an economic recovery in Japan

Related Stories

Japan's main stock index has closed at its highest level for nearly six years, tracking overnight gains on Wall Street and buoyed by a weak yen.

The Nikkei 225 rose 1.8% to 15,727.12 points, the highest level since December 2007.

The index has surged nearly 50% this year after a series of aggressive moves by policymakers to help boost growth.

The measures have resulted in a fall in the yen's value, lifting exports and boosting profits of exporters.

The Japanese currency has dipped nearly 25% against the US dollar since the start of this year.

That makes Japanese goods more affordable for foreign buyers and boosts profits of exporters when they repatriate their foreign earnings back home.

"There has been risk-taking momentum due to several positive factors, including the yen's decline below 102 against the US dollar," said Kenzaburo Suwa, a strategist with Okasan Securities.

"It would not be a surprise to see the Nikkei top 16,000," he added.

Earlier this month, figures showed that economic growth in the country slowed to 0.5% during the July-to-September period, down from 0.9% in the previous quarter.

Continued recovery?

However, policymakers have said that Japan's recovery remains on track despite the slowdown, not least because of the aggressive moves announced over the past year.

Prime Minister Shinzo Abe, who came to power last year, has unveiled a series of measures based on the so-called "three arrows" - monetary policy, fiscal stimulus and structural reforms.

Nikkei 225 Index

Last Updated at 14 Jul 2014, 02:45 ET Nikkei 225 twelve month chart
value change %
15296.82 +
+132.78
+
+0.88

The first arrow, monetary policy, is aimed at ending Japan's almost two decades of falling prices, or deflation.

The measures have already started to make an impact. Consumer prices in Japan have now risen for four months in a row.

Earlier this month, Japan's central bank said it had no intention to reduce its asset-buying scheme - launched in April and also aimed at reviving the country's economy - which has further boosted investor morale.

The bank is buying bonds worth up to 70 trillion yen ($700bn; £435bn) a year.

The second arrow has seen Mr Abe announce plans to boost government spending on infrastructure to foster growth.

And the third arrow - reforms in key sectors - is aimed at encouraging private investment in the country.

Though any substantial reforms are yet to be announced, Japan has made some move in this area, such as joining the Trans Pacific Partnership (TPP) trade talks.

The TPP is a free trade agreement currently being negotiated among 12 countries.

The trade pact is expected to lead to big reductions in tariffs on goods and services between member countries, boosting trade between them and helping their economies.

More on This Story

Related Stories

More Business stories

RSS

BBC Business Live

  1.  
    CITIGROUP SETTLEMENT 09:40:
    Citibank

    US banking giant Citigroup may have to pay an eye-watering $7bn (£4bn) to settle a government investigation into dodgy financial products backed by mortgages that the bank sold in the run-up to the financial crisis. Reports say that settlement could be announced later today. Last year JP Morgan Chase agreed to pay $13bn to settle similar allegations.

     
  2.  
    WOMEN IN INDUSTRY 09:23: Radio 5 live

    Fewer than 4% of people working in the oil and gas industry are women. Radio 5 live speaks to Duncan Abernethy from Banff and Buchan College in Aberdeen. It has a special training course for women. He says four big energy companies sponsor the course, which is proving very popular.

     
  3.  
    MANAGEMENT SPEAK 09:18: BBC Radio 4

    "A mobile-first, cloud-first world" in which "nothing is off the table" says Microsoft's new(ish) boss Satya Nadella in a 3,000 word email in which he quotes Nietzche and Rilke. Matthew Gwyther, editor of Management Today told Today "just say what you mean". For more on corporate nonsense read this feature.

     
  4.  
    NORTH SEA OIL 09:08: BBC Radio 4

    The BBC's Business Editor Kamal Ahmed has been talking about a review of North Sea oil taxes on Today. He says the industry used to be "like an exclusive nightclub with bouncers on the door only allowing celebrity VIPs access". Now he likens it to "a trattoria touting for business on the pavement outside".

     
  5.  
    ADIDAS 09:00:
    Brazuca football

    Adidas is the biggest winner among shares on the Dax index in Frankfurt - up 2%. It had a great weekend, with Germany - one of the teams it sponsors - winning the World Cup. It is also the sponsor of Argentina, the beaten finalists. Adding to the euphoria, Adidas's big rival Nike sponsored Brazil, who had a disastrous World Cup.

     
  6.  
    NORTH SEA OIL 08:53: Radio 5 live
    North sea oil rig

    There has been a "significant" reduction in exploration for oil in the North Sea, according to Oonagh Werngren, operations director, of industry body Oil and Gas UK. In 2008 40 exploratory wells were drilled, last year it was just 15, she said on Radio 5 live. She blames higher taxes for making the North Sea less attractive to oil firms.

     
  7.  
    MARKET UPDATE 08:45:
     
  8.  
    FORD SOUTH AFRICA 08:35:
    Metal Workers protest, Durban

    Ford says production at its plant in Pretoria, South Africa has been suspended due to a strike by metalworkers. General Motors' plant in Port Elizabeth has also been closed. Labour relations in South African have been deteriorating - the platinum industry was shutdown for months due to a strike by miners.

     
  9.  
    BROADBAND 08:27: BBC Breakfast
    Dominic Laurie and a horse

    BBC Breakfast's Dominic Laurie (on the right) is at a stable in Milton Keynes to talk about today's broadband report. RB Equestrian has had problems with its broadband speed, with employees finding it quicker to go home to upload pictures. A telecoms expert from Ovum says businesses should consider using 4G (hi-speed mobile network) because it sometimes works faster than broadband.

     
  10.  
    SHIRE TAKEOVER BID 08:19: BBC Radio 4

    Panmure Gordon's pharmaceutical analyst, Savvas Neophytou tells the Today programme he thinks the Shire deal will now go through. His research estimates that the benefit to AbbVie in moving its tax base to the UK (one of the reasons for the deal) is around $350mn and it could be as much as $600m. For the UK it means more jobs, he says.

     
  11.  
    SHIRE TAKEOVER BID 08:06:

    Quick check on Shire's shares...they're up 3% this morning after the news that it will recommend the latest takeover offer from US rival AbbVie.

     
  12.  
    AIRBUS A330 07:59:
    Rolls-Royce engine

    Airbus has launched the much anticipated A330neo aircraft at the Farnborough Airshow. It's a more fuel efficient version of the plane and will be powered by Rolls-Royce engines. You can keep up with our Farnborough coverage here.

     
  13.  
    CHILD LABOUR 07:50: BBC World News

    Samsung Electronics has suspended business ties with Chinese supplier, Dongguan Shinyang Electronics, after it uncovered evidence that suggested it used child labour. China Labor Watch said Shinyang employed children for three to six months during a particularly busy period. On World Business Report, Rico Hizon said the watchdog found at least five workers without contracts.

     
  14.  
    PORTUGUESE BANK 07:38:
    Banco Espirito Santo

    The bank that roiled the markets last week - Portugal's Banco Espirito Santo (BES) - has been told to appoint a new chief executive, reports the Financial Times. It seems the Bank of Portugal ordered BES to hold an emergency meeting on Sunday night to name Vitor Bento as the bank's new boss - described by the FT as " a respected economist and company manager".

     
  15.  
    WORLD CUP 07:33: BBC Radio 4
    German team, Brazil

    How was it for Brazil? Not on the pitch - but off it. Well, the World Cup wasn't the logistical disaster that many had predicted says the BBC's Katy Watson on Today. But Tom Cannon from Liverpool University says the tournament will leave the country deeper in the red and has not generated much long term economic legacy.

     
  16.  
    HEADLINES
     
  17.  
    SHIRE TAKEOVER BID 07:21:

    The board of UK drugs firm Shire is recommending a takeover offer from US rival AbbVie. It follows a revised offer worth £53.20 per share in cash and shares. AbbVie has raised its bid several times. It's an attractive deal for AbbVie as it can potentially dramatically reduce its tax bill.

     
  18.  
    CHOCOLATE DEAL 07:03:
    Russell Stover

    Never heard of Russell Stover? Well, according to its website, it was founded in 1923 by Clara and Russell Stover in their Denver bungalow. And it is a box of Russell Stover chocolates that leads Forrest Gump to quote his mother: "My mama always said, life was like a box of chocolates, you never know what you're gonna get."

     
  19.  
    CHOCOLATE DEAL 06:54:
    Man holding Lindt chocolate bar

    The Swiss chocolate company Lindt & Spruengli has confirmed it is buying an American firm Russell Stover Candies. The company says the deal "broadens its brand portfolio in the world's biggest chocolate marketplace" and that it is the "biggest and most important strategic acquisition in the company's history". The purchase price has not been disclosed.

     
  20.  
    BROADBAND 06:43: Radio 5 live
    Cables

    This seems hard to believe - some companies are still using a "dial-up" internet service, according to The Federation of Small Businesses. It says that UK broadband is not fit for purpose. Sue Terpilowski who runs marketing firm ImageLine tells Wake Up to Money her firm has been suffering dial up broadband speeds. Ironically her office is near London's hi-tech hub Silicon Roundabout.

     
  21.  
    CHEKHOV'S GUN 06:34: Radio 5 live

    A literary reference baffles presenter Mickey Clarke on Wake Up to Money. Markets guest Brenda Kelly says that "loose monetary policy has been something of a Chekhov's gun". "What's a Chekhov?" asks Mickey.

     
  22.  
    FARNBOROUGH AIRSHOW 06:27: BBC World News
    A330 plane

    "The A330 is a good rock solid airplane" says John Leahy, chief operating officer at Airbus on World Business Report, but he says it could be more fuel efficient. Leaner burning engines are part of the revamp that is set to be announced for the widebody passenger jet at the Farnborough Airshow this morning.

     
  23.  
    EXECUTIVE PAY 06:21:
    Boardroom graphic

    Executive pay has grown from 60 times that of the average worker to almost 180 times since the 1990s, according to the High Pay Centre. The think tank is calling on the government to take action to close the pay gap between company executives and their workers.

     
  24.  
    GLAXO CHINA 06:12:
    Glaxo Shanghai

    The Chinese authorities have formally charged a British businessman and his American wife for illegally obtaining and selling private information. Peter Humphrey and Yingzeng Yu were arrested last year in connection with a wider investigation into the British pharmaceutical giant GlaxoSmithKline. The couple, who run a corporate investigation company, were employed by GlaxoSmithKline last year.

     
  25.  
    SCOTTISH INDEPENDENCE 06:08: Radio 5 live

    More from Sir Tom Hunter, he tells Wake Up to Money that Scotland's entrepreneurial spirit was "pretty much extinguished" by mining, steel making and ship building. He believes that children need to be encouraged to be entrepreneurial at school.

     
  26.  
    SCOTTISH INDEPENDENCE 06:07: Radio 5 live

    Wake Up to Money is in Aberdeen and interviews one of Scotland's richest men, Sir Tom Hunter. He says that politicians are doing voters a "disservice" in the independence debate by providing two completely different answers over what would happen to the pound if Scotland were to leave the union.

     
  27.  
    CURRENCY MARKET INVESTIGATION 06:01:
    canary wharf

    US prosecutors are offering immunity deals to junior traders in London as part of their investigation into manipulation of the currency markets, according to the lead story in this morning's Financial Times. The report says that junior staff have been offered the deals, in return for information about their superiors.

     
  28.  
    06:00: Emily Young, Business Reporter

    Morning all. The World Cup is over but don't worry the Farnborough Air Show has begun. We'll have updates from there throughout the morning.

     
  29.  
    06:00: Ben Morris Business Reporter

    Is British broadband a bit feeble? The Federation for Small Business thinks so and that's one of the issues under discussion this morning. Stay with the Business live page. You can emails us at bizlive@bbc.co.uk or tweet @bbcbusiness.

     

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.