//"Just because politicians say they want to restart reactors doesn't mean they will actually be able to do it," said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo
It's more like just because the public doesnt want reactors doesn't mean they will hold that view when they find their lights are out every night.
Nuclear Stock Rally in Japan Ignores Public Opposition
Japanese power-company stocks that jumped the most since 2008 after the pro-nuclear energy Liberal Democratic Party was elected will struggle to rally further because of public opposition to restarting atomic plants.
Tokyo Electric Power Co. (9501) and Kansai Electric Power Co. (9503), the atomic-reactor operators most punished in the stock market after the Fukushima disaster last year, leaped by their daily limit in Tokyo yesterday and led a 9.2 percent gain in the Topix Electric Power & Gas Index. (TPELEC) Uranium stocks gained, including a 13 percent increase by Australia's Bannerman Resources Ltd. The LDP has said Japan needs its 50-reactor fleet working to reduce costs of importing fuel for gas- and coal-fired plants.
"Just because politicians say they want to restart reactors doesn't mean they will actually be able to do it," said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo, which has about $400 billion in assets. "It'll be hard to maintain these stock gains," she said.
Any plans to restart reactors will need approval from the Nuclear Regulation Authority, which is investigating six atomic plants on concern they were built on active fault lines. Japanese law states reactors cannot be built on active faults, indicating the plants may need to be decommissioned.
"Proving safety is going to be really hard," Sera said.
The meltdowns at Tokyo Electric Power reactors and ensuing radioactive contamination led nations from China to France and Switzerland to review atomic policies, including the phase-out ordered by German Chancellor Angela Merkel. Countries including Britain affirmed plans to rely more on atomic power.
European Backpedaling?
The likelihood of backpedaling in central Europe is even slimmer than in Japan, "for the simple reason that Japan's energy crunch without nuclear is far greater than in countries like Germany or Switzerland," said Mark Hibbs, senior associate at the Carnegie Endowment nuclear policy program in Berlin.
Andreas Loeschel, an adviser to Germany's government on monitoring its energy transformation, said in a telephone interview that there's unlikely to be an impact on his country.
"The energy shift in Germany has such a momentum that it is not influenced by a change of government in Japan," said Loeschel, a professor who heads environmental and resource economics at the Centre for European Economic Research ZEW in Mannheim.
Japan's LDP, led by former Prime Minister Shinzo Abe, took 294 seats in the 480-member lower house of parliament, public broadcaster NHK said yesterday. The party governed for all but 10 months since 1955 and oversaw Japan's development of atomic energy. It was ousted in 2009, two years before an earthquake and tsunami crippled the Fukushima Dai-Ichi nuclear plant, releasing radiation and forcing evacuation of 160,000 people.
LDP Voters
"People who voted for the LDP are supporting their economic-stimulus measures, not nuclear power policy," said Toshihiro Inoue, a member of the "Goodbye Nuclear: the Action of 10 Million" civil movement, whose online petition to stop atomic reactors in Japan has so far received about 8.2 million signatures.
Tens of thousands of nuclear power opponents held weekly protests outside Prime Minister Yoshihiko Noda's official residence this year. A government-backed public forum found in August that 47 percent of participants favored cutting nuclear power to zero, while newspaper polls in the last 18 months consistently showed support for ending atomic power in Japan.
All but two of Japan's 50 nuclear reactors are idled due to public safety concerns. Outgoing Prime Minister Yoshihiko Noda's Democratic Party of Japan said it would phase out nuclear power by the end of the 2030s after the repeated mass public rallies.
LDP Opinion
In contrast, LDP General Council Chairman Hiroyuki Hosoda said on Nov. 27 that Japan must restart its nuclear reactors quickly because of the high prices for gas, coal and oil used to fire thermal power plants.
The rally by utilities today "is fairly reflective of the market's expectation for reactor restarts," Edward Sterck, an analyst at BMO Capital Markets in London, said today by phone. "It reduces the likelihood of further uranium price declines."
The change of ruling party should mark an alteration in nuclear policy, according to Kansai Electric's Chief Executive Officer Makoto Yagi.
The Federation of Electric Power Companies, which includes Japan's dominant nine regional utilities that own atomic plants, would like the new government to revise the nuclear energy policy of the previous administration, Yagi, who is also the chairman of the federation, said yesterday in a statement.
Kansai Case
Kansai Electric relied on nuclear for almost half its generated power in the year before the 2011 disaster. It reported a record first-half loss of 117 billion yen ($1.4 billion) after the shutdown of reactors forced the utility to import fuels for gas-, oil- and coal-fired plants.
Tepco jumped by 33 percent to 202 yen at the close in Tokyo yesterday, while Kansai Electric rose 18 percent to 920 yen, its biggest jump since at least Sept. 11, 1974. Tohoku Electric Power Co. (9506) advanced 15 percent to 857 yen.
The Metropolitan Coalition Against Nukes, another civil movement, said on its website it will protest the restart of nuclear reactors outside the prime minister's official residence on Dec. 21.
"Even for the LDP it will be difficult to gain support from residents living near nuclear stations for restarting them, as the tragedy in Fukushima is not over," Inoue at Goodbye Nuclear said.
To contact the reporters on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net; Yuji Okada in Tokyo at yokada6@bloomberg.net
To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net
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