Japan Power Companies Surge After Nuclear Report: Tokyo MoverJacob Adelman
Tokyo Electric Power Co. rose by the most in almost four months, leading Japanese utilities higher after the Nikkei newspaper said the government would move to revise the law governing compensation from nuclear accidents.
Officials from Japan’s science and trade ministries could set up a committee as early as June to discuss the revisions, the Nikkei reported, citing remarks made in parliament today by Yoshitaka Sakurada, vice minister for education and science, told parliament today.
Discussions would probably focus on the division of responsibility between the government and nuclear plant operators for compensation costs, the Nikkei reported.
An earthquake and tsunami in March 2011 caused the meltdown of three reactors at Tokyo Electric’s Fukushima Dai-Ichi atomic plant, the worst civilian atomic disaster since Chernobyl in 1986. About 160,000 people were forced to evacuate because of radiation fallout, leaving the utility, known as Tepco, with billions of dollars in compensation and cleanup costs that brought the company to the brink of insolvency.
Investors were betting the government would cap the amount of compensation that electric power companies, or EPCOs, would have to pay in the event of future nuclear accidents, Yuji Nishiyama, an analyst with JP Morgan Securities Japan Co., said in an interview.
“The revision of the law means there will be a limit to the amount of liability for EPCOs when an accident occurs,” Nishiyama said. “That is pretty good for the EPCOs with nuclear plants.”
Tepco rose 21 yen, or 5.4 percent, to 413 yen in Tokyo, the biggest one-day gain since Feb. 7. The shares earlier rose as much as 14 percent. Kansai Electric Power Co. rose 2 percent to 939 yen, while Kyushu Electric Power Co. gained 0.7 percent.
The Topix Electric Power & Gas Index advanced 1.2 percent after earlier gaining as much as 3.8 percent.