Boston, MA, 02/27/2014 (usastockreport) – Cameco Corporation (USA) (NYSE:CCJ) rose steeply to as much as 5% on the previous day after Japan put forth its pro-nuclear stance. It has come to light that Japan’s Shinzo Abe government has tabled a new Basic Energy Plan which acknowledges nuclear power as an important role-player, thereby, indicating another positive development for the uranium industry.
Japan And Uranium Connection
Japan’s nearly 30% of the power supply was generated from nuclear energy prior to the Tsunami disaster, which occurred three years back. Following the threat posed by the damage of Fukushima nuclear plant, Japan decided to shut down all of its nuclear reactors back then. This event drove the uranium industry and the concerned group to the utter confusion as to the future of nuclear energy in the country. Even Japan’s former government pledge to phase out nuclear plants mounted pressure on the industry.
The effect of Japan’s decision started showing on the industry as the uranium market players like BHP Billiton plc (NYSE:BBL) and Goldman Sach declared their exit from the uranium business segment. In the past earnings, Cameco Corporation (USA) (NYSE:CCJ) had mentioned the future uncertainty gripping it due to Japan’s nuclear reactors. It had mentioned that Japan’s lacking in restarting its nuclear reactors has led the uranium market conditions to deteriorate in 2013. This forced Cameco Corporation (USA) (NYSE:CCJ) to remove its 2018 supply target of 36 million pounds. But, now the latest draft by Japan sounds positive for the uranium industry. Through the latest Basic Energy Plan, Japan has clearly signalled that it will restart nuclear reactors, which are approved as safe by the Nuclear Regulatory Authority.
Japan’s Trade Deficit- Main Catalyst
Japanese government’s reversal in plans is attached to the finances. This is clear from the report released last week, which showed that its trade deficit sits at $27.3 billion in January, accredited to the higher dependence on alternative energy imports of oil and gas to feed the energy demand. Therefore, the mounting trade deficit is a major catalyst for the government to reopen its doors to nuclear energy, while the opponents of the idea too are fairly large.