Japan nuclear shares jump on LDP victory

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Shares in Tepco, operator of the tsunami-hit Fukushima nuclear power station, jumped 33pc after a pro-nuclear election win in Japan (EUREX: FMJP.EX - news) likely means any short-term plan to ditch atomic power will be shelved.

Tokyo Electric Power (Other OTC: TKECF.PK - news) (Tepco) increased 32.9pc to 202 yen by the close, Chubu Electric Power jumped 9.59pc to 1,188 yen and Kansai Electric was up 17.6pc at 920 yen.

The huge surge on the Tokyo Stock Exchange came after voters on Sunday dumped Prime Minister Yoshihiko Noda and his Democratic Party of Japan (DPJ), giving the pro-business Liberal Democratic Party a landslide victory .

Anti-nuclear sentiment has run high in Japan after last year's Fukushima crisis, with opinion polls showing a majority of voters wanted to phase out nuclear power.

However, that failed to translate into wider support for the DPJ, which had pledged to work toward a zero-nuclear country, or a group of small anti-nuclear parties which had little impact at the polling booth.

Premier (BSE: PREMIER.BO - news) -in-waiting Shinzo Abe, the LDP's hawkish head, derided the zero-nuclear goal as unrealistic and "irresponsible" - and hinted at keeping atomic power.

The LDP has said it would decide on reactor restarts in three years and the nation's "best energy mix" within a decade.

Major business lobby Keidanren said in a statement Monday that it "welcomes the LDP's landslide victory".

Japan 's benchmark Nikkei 225 (Osaka: ^N225 - news) rose 1.62pc at the open on Monday but fell back to close up 0.9pc at 9828.88.

In earlier Tokyo forex trading, the dollar soared to 84.30 yen, up from 83.52 yen in New York (Frankfurt: A0DKRK - news) on Friday, and its strongest level against the Japanese currency in more than a year and a half.

Japanese exporters have also been suffering from a strong yen, which hit record levels around 75 against the dollar late last year and remains historically strong despite its recent weakening.

Mr Abe pledged to bolster Japan's defences in the face of a territorial spat with China while vowing to pressure the Bank of Japan (BoJ) into more aggressive policy easing measures in a bid to inject new life into the world's third-largest economy.

He wants the central bank to buy government bonds - effectively printing money - to generate inflation, in a bid to drag Japan out of the deflationary spiral that has haunted its economy for years.

Turmoil in the European market, an unsteady economic recovery in the US and a diplomatic row between Tokyo and Beijing over an East China Sea island chain, which sparked a consumer boycott of Japanese products, all weighed on the economy as it recovered from last year's quake-tsunami disaster.

Mr Abe also offered to boost spending on infrastructure at a time when much of the tsunami-wrecked northeast remains a shell of its former self.