CHART OF THE DAY: Thanks To Abenomics, Japan's Most Controversial Company Is Up 400% This Year

Business Insider

Here's a pretty shocking chart: it's the share price of TEPCO, the beleaguered Japanese power company at the center of the Fukushima nuclear disaster that followed from the Japanese earthquake in April 2011.

Year-to-date, the stock is up 396%. In recent days, it's gone absolutely vertical in the past few days on speculation that the company will at last power up its nuclear reactors again, which have been shut down since the disaster.

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Chart of the day shows TEPCO share price, may 2013

Business Insider/Matthew Boesler, data from Bloomberg

Bloomberg's Tsuyoshi Inajima has the details:

Tepco shares yesterday rose 16 percent to 726 yen after the  Yomiuri newspaper reported the utility will apply to the Nuclear  Regulation Authority for a restart of No. 1 and No. 7 units at  the Kashiwazaki Kariwa plant in northern Japan in July.

Tepco denied the Yomiuri report and said the utility is  still designing a filtered vent system, part of the new safety  requirements to be set by the nuclear safety watchdog. The  company can’t say when it can complete the installation.

Of course, the announcement and beginning of the implementation of the Japanese government's "Abenomics" economic stimulus strategy has caused the broader Japanese stock market to surge this year, making it one of the best performing global stock markets so far in 2013. (The surge in stocks is also a byproduct of the weakening Japanese yen, which has been the primary conduit of Abenomics so far.)

But what exactly does Abenomics have to do with TEPCO?

The yen, which has weakened from 86.70 to the U.S. dollar at the beginning of 2013 to levels around 102.40 today, is making energy imports more and more expensive for Japan. This has caused deterioration over Japan's current account, which is leading to concern over rising deficits.

Those expensive energy imports are hitting the power companies – including TEPCO – pretty hard, especially as nuclear reactors remain shuttered.

Here's more from Bloomberg's Tsuyoshi Inajima:

Last month, Japan’s nine power companies reported combined  losses of about 1.6 trillion yen ($15.6 billion) for a second  consecutive year as they face higher fossil fuel bills with most  nuclear reactors shut.

The utilities will be forced to pay 3.8  trillion yen more in combined fuel costs this fiscal year,  compared with fiscal 2010, because of shutdowns and a weaker  yen, according to a government advisory board estimate in April.

The situation is likely increasing the urgency to re-start nuclear power reactors in Japan. New Prime Minister Shinzo Abe has said he approves of powering some of them back up as long as they meet safety requirements currently being checked by regulators, a shift away from the previous Japanese government's goal to phase out all nuclear power by 2030.



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