nikkei

Japan- Nikkei Closes 1.22% Higher

by on August 24, 2011

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(MENAFN – Qatar News Agency) Tokyo stocks closed sharply higher Tuesday with the key Nikkei stock index surging 1.22 percent. The benchmark Nikkei 225 Average gained 104.88 points from Monday to …

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Japan- Nikkei Closes 1.22% Higher

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FOREX: Dollar Traders Keep a Close Eye on the Contagion of Nikkei 225 Losses

by on March 15, 2011

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FOREX: Dollar Traders Keep a Close Eye on the Contagion of Nikkei 225 Losses

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FOREX: Dollar Traders Keep a Close Eye on the Contagion of Nikkei 225 Losses

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Japan’s Nikkei Collapses; Yen Remains Bid For Now on Repatriation Flows

March 15, 2011

Japan’s Nikkei Collapses; Yen Remains Bid For Now on Repatriation Flows

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Stocks, Oil Rise on U.S. Home, Car Sales Default Risk Drops

June 2, 2010

By Akiko Ikeda June 3 (Bloomberg) — Asian stocks rallied the most in more than three months, commodities rose and bond risk fell as rising sales of U.S. homes and cars bolstered confidence in the global economy. The yen weakened for a second day against the euro. The MSCI Asia Pacific Index advanced 2 percent to 112.98 as of 10:27 a.m. in Tokyo, the most since Feb. 22. Oil for July delivery climbed 1.2 percent to $73.71 a barrel after an industry report showed a decline in U.S. crude inventories. Futures on the Standard & Poor’s 500 Index rose 0.1 percent today, after the index surged 2.6 percent yesterday. Asian stocks are recovering, following a 10 percent drop in May that was the biggest in 19 months, as reports showed pending sales of existing homes rose faster than expected in April and U.S. auto sales climbed 19 percent in May from a year earlier. Japanese investors bought a net 1.17 trillion yen ($12.7 billion) in overseas debt during the week ended May 28 and 276 billion yen in overseas stocks, Ministry of Finance data showed. “Exporters should rise after the U.S. housing data showed the economy is recovering,” said Mitsushige Akino , who oversees the equivalent of $450 million in Tokyo at Ichiyoshi Investment Management Co. “Declines in energy-related stocks yesterday were too much. They should rally today.” Japan’s Nikkei 225 Stock Average rose 2.7 percent, while South Korea’s Kospi index climbed 1.5 percent. An index of pending U.S. home resales rose 6 percent in April, the National Association of Realtors said, exceeding the median forecast of economists surveyed by Bloomberg News. Canon, Nissan Canon Inc. , a camera maker that gets about 80 percent of its revenue outside Japan, gained 3.1 percent. Mitsui & Co. advanced 2.7 percent on speculation yesterday’s 8.3 percent drop in response to the oil spill in the Gulf of Mexico was excessive. Itochu Corp. surged 4.7 percent after the Nikkei newspaper said the trading company and General Electric Co. entered a partnership involving renewable-energy operations. Nissan Motor Co., Japan’s third-largest automaker, climbed 4.2 percent after yesterday reporting a 24 percent increase in U.S. car sales in May from a year earlier. Toyota Motor Corp., the world’s biggest carmaker, climbed 3.3 percent after posting a 6.7 percent sales gain. The Japanese yen weakened 0.5 percent to 113.42 versus the euro. The currency depreciated 0.1 percent to 92.24 against the dollar, after dropping 1.3 percent yesterday. A weaker yen boosts the value of overseas sales for Japanese companies when converted into their home currency. Political Upheaval Japanese Deputy Premier and Finance Minister Naoto Kan , 63, who has called for the Bank of Japan to do more to fight deflation, said he would run for the party leadership contest after Prime Minister Yukio Hatoyama resigned yesterday. The South Korean won rose 0.8 percent to 1,206.65 per dollar. JPMorgan Chase & Co. yesterday raised the nation’s equities to “overweight” and said the won is one of the “most undervalued” emerging-market currencies. The cost of insuring Asia-Pacific bonds from non-payment dropped, according to traders of credit-default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan declined 10 basis points to 135, according to Royal Bank of Scotland Group Plc. Wells Fargo & Co. advanced 3.4 percent yesterday after saying consumer credit began to improve last November. Bank of America Corp. jumped 3 percent after Chief Executive Officer Brian Moynihan said loan demand is stabilizing. Copper for delivery in three months on the London Metal Exchange climbed as much as 1.4 percent to $6,760 a metric ton on global growth optimism. Nickel advanced as much as 2.8 percent to $20,200, lead rose 2.9 percent to $1,745 and zinc also gained 2.9 percent to $1,855. To contact the reporters on this story: Yusuke Miyazawa in Tokyo at ymiyazawa3@bloomberg.net . Akiko Ikeda in Tokyo at iakiko@bloomberg.net .

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Hatoyama Resignation Makes Japanese Equities Less Attractive, ING, AMP Say

June 2, 2010

By Shani Raja June 3 (Bloomberg) — Yukio Hatoyama ’s resignation has added to Japan’s political instability, blunting the appeal of equities at their cheapest in 17 months, fund managers at ING Investment Management and AMP Capital Investors Ltd. said. Prime Minister Hatoyama quit yesterday, less than nine months after a landslide election victory, as funding scandals and a broken promise to relocate U.S. troops cost him the support of four in five voters. The Nikkei 225 Stock Average sank 1.1 percent, the most in a week, while the yen depreciated to a two-week low versus the dollar. “The political instability has made Japan less attractive,” said ING’s Philip Schwartz , who manages about $1.2 billion of international equities in New York for the firm. “I’ve been gradually reducing exposure to Japan due to both economic and leadership issues. I’m not so sure what will drive the market higher.” The Nikkei 225 has fallen 8.8 percent since the end of August, when Hatoyama’s Democratic Party of Japan ousted the Liberal Democratic Party, ending almost 50 years of rule. Hatoyama’s term was the shortest for a Japanese leader since 1994, and his resignation forces parliament to select the nation’s fifth prime minister in four years. The DPJ may choose a new head on June 4, legislator Yoshimitsu Takashima told reporters yesterday, and the new leader would become prime minister because of the party’s majority in the lower house of parliament. ‘Structural Problems’ “For a while there’s been an atmosphere of political instability,” said Nader Naeimi , a Sydney-based strategist at AMP Capital, which holds $90 billion. “There were hopes this new government would address the country’s structural economic problems, but still you’re not seeing enough in terms of improving domestic demand because people are afraid about their jobs and salaries.” The Nikkei has tumbled 15 percent from its high this year on April 5 on concern Europe’s debt crisis will spread and on signs Japan’s economic recovery is losing momentum. Companies on the Nikkei 225 were priced at an average 17.7 times estimated earnings on May 25, the cheapest since Dec. 24, 2008. They were valued yesterday at 17.9 times. The country’s industrial production grew in April by less than economists forecast, according to a May 31 Trade Ministry report. Data last week showed the nation’s export-led revival has been slow to spread to consumers — the nation’s unemployment rate rose in April, job prospects worsened, and household spending and consumer prices fell. Bonds, Yen Japan’s public debt is approaching 200 percent of gross domestic product, the biggest among the 30-member Organization for Economic Cooperation and Development. Takao Komine , a professor at Hosei University and a former bureaucrat, has said the government may suffer fiscal collapse in 10 to 15 years if the DPJ maintains its expansionary spending policy. “We’re waiting for more clarity on the political landscape before making any new investment decisions even though valuations are looking pretty attractive,” said AMP Capital’s Naeimi. “We’re looking to see improvements in household spending, alongside a clear economic roadmap for moving forward.” The cost of insuring corporate bonds from non-payment in Japan rose yesterday, according to Morgan Stanley prices, while the yen weakened against all of its most-traded counterparts. Any weakness in the yen will give little more than a short- term boost to companies reliant on overseas sales such as Toyota Motor Corp. , the world’s largest carmaker, and electronics maker Sony Corp., said ING’s Schwartz. Japan’s currency has risen 1.5 percent versus the dollar and 19 percent against the euro this year through yesterday, curbing the appeal of export stocks. “If the yen stays weak, that’s great,” Schwartz said. “I’m just not sure it can stay weak.” Fifth Leader Hatoyama’s resignation makes him the shortest-serving Japanese Prime Minister since Tsutomu Hata led a minority government for two months in 1994. He would also make way for the country’s fifth leader since Junichiro Koizumi stood down in September 2006. Likely candidates to replace Hatoyama include Finance Minister Naoto Kan , National Strategy Minister Yoshito Sengoku and Foreign Minister Katsuya Okada , according to Gerald Curtis , a professor of Japanese politics at Columbia University in New York. “We won’t majorly change our investment strategy,” said Ayako Sera , a strategist at Tokyo-based Sumitomo Trust & Banking Co., which manages the equivalent of $307 billion. “The only change we would make is if we get a more coherent group of policymakers.” To contact the reporters for this story: Shani Raja in Sydney at sraja4@bloomberg.net .

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Hatoyama Resignation Makes Japanese Equities Less Attractive, ING, AMP Say

June 2, 2010

By Shani Raja June 3 (Bloomberg) — Yukio Hatoyama ’s resignation has added to Japan’s political instability, blunting the appeal of equities at their cheapest in 17 months, fund managers at ING Investment Management and AMP Capital Investors Ltd. said. Prime Minister Hatoyama quit yesterday, less than nine months after a landslide election victory, as funding scandals and a broken promise to relocate U.S. troops cost him the support of four in five voters. The Nikkei 225 Stock Average sank 1.1 percent, the most in a week, while the yen depreciated to a two-week low versus the dollar. “The political instability has made Japan less attractive,” said ING’s Philip Schwartz , who manages about $1.2 billion of international equities in New York for the firm. “I’ve been gradually reducing exposure to Japan due to both economic and leadership issues. I’m not so sure what will drive the market higher.” The Nikkei 225 has fallen 8.8 percent since the end of August, when Hatoyama’s Democratic Party of Japan ousted the Liberal Democratic Party, ending almost 50 years of rule. Hatoyama’s term was the shortest for a Japanese leader since 1994, and his resignation forces parliament to select the nation’s fifth prime minister in four years. The DPJ may choose a new head on June 4, legislator Yoshimitsu Takashima told reporters yesterday, and the new leader would become prime minister because of the party’s majority in the lower house of parliament. ‘Structural Problems’ “For a while there’s been an atmosphere of political instability,” said Nader Naeimi , a Sydney-based strategist at AMP Capital, which holds $90 billion. “There were hopes this new government would address the country’s structural economic problems, but still you’re not seeing enough in terms of improving domestic demand because people are afraid about their jobs and salaries.” The Nikkei has tumbled 15 percent from its high this year on April 5 on concern Europe’s debt crisis will spread and on signs Japan’s economic recovery is losing momentum. Companies on the Nikkei 225 were priced at an average 17.7 times estimated earnings on May 25, the cheapest since Dec. 24, 2008. They were valued yesterday at 17.9 times. The country’s industrial production grew in April by less than economists forecast, according to a May 31 Trade Ministry report. Data last week showed the nation’s export-led revival has been slow to spread to consumers — the nation’s unemployment rate rose in April, job prospects worsened, and household spending and consumer prices fell. Bonds, Yen Japan’s public debt is approaching 200 percent of gross domestic product, the biggest among the 30-member Organization for Economic Cooperation and Development. Takao Komine , a professor at Hosei University and a former bureaucrat, has said the government may suffer fiscal collapse in 10 to 15 years if the DPJ maintains its expansionary spending policy. “We’re waiting for more clarity on the political landscape before making any new investment decisions even though valuations are looking pretty attractive,” said AMP Capital’s Naeimi. “We’re looking to see improvements in household spending, alongside a clear economic roadmap for moving forward.” The cost of insuring corporate bonds from non-payment in Japan rose yesterday, according to Morgan Stanley prices, while the yen weakened against all of its most-traded counterparts. Any weakness in the yen will give little more than a short- term boost to companies reliant on overseas sales such as Toyota Motor Corp. , the world’s largest carmaker, and electronics maker Sony Corp., said ING’s Schwartz. Japan’s currency has risen 1.5 percent versus the dollar and 19 percent against the euro this year through yesterday, curbing the appeal of export stocks. “If the yen stays weak, that’s great,” Schwartz said. “I’m just not sure it can stay weak.” Fifth Leader Hatoyama’s resignation makes him the shortest-serving Japanese Prime Minister since Tsutomu Hata led a minority government for two months in 1994. He would also make way for the country’s fifth leader since Junichiro Koizumi stood down in September 2006. Likely candidates to replace Hatoyama include Finance Minister Naoto Kan , National Strategy Minister Yoshito Sengoku and Foreign Minister Katsuya Okada , according to Gerald Curtis , a professor of Japanese politics at Columbia University in New York. “We won’t majorly change our investment strategy,” said Ayako Sera , a strategist at Tokyo-based Sumitomo Trust & Banking Co., which manages the equivalent of $307 billion. “The only change we would make is if we get a more coherent group of policymakers.” To contact the reporters for this story: Shani Raja in Sydney at sraja4@bloomberg.net .

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Resona Wants Government to Cut $18 Billion Stake by November; Shares Rise

May 19, 2010

By Finbarr Flynn and Takako Taniguchi May 20 (Bloomberg) — Resona Holdings Inc. , Japan’s fourth- largest bank, said it wants to buy back part of 1.67 trillion yen ($18 billion) in convertible preference shares owned by the government by November, easing investors’ dilution concerns. Chairman Eiji Hosoya is pushing the state to reduce its stake before the bank submits a four-year business plan to regulators. Resona shares rose the most in five months in Tokyo. The Osaka-based bank, whose stock fell more last year than rivals who issued new shares, wants to lift uncertainty for investors about the government’s plans for the preferred shares. is in talks with the Deposit Insurance Corp. of Japan to buy back the securities at about the same price the government paid in 2003 when it bailout the bank, Hosoya said in an interview yesterday. He said the agency is demanding a “high premium.” “Investors for a long time have liked the idea of funds being repaid to the government,” said David Threadgold , a Tokyo-based analyst for Keefe Bruyette & Woods Inc. Buying back the shares should help dispel dilution concerns, he said. Resona rose as much as 8.7 percent on the Tokyo Stock Exchange and traded up 2.8 percent at 1,102 yen as of 1:03 p.m. The Nikkei 225 Stock Average fell 1.3 percent. The shares fell 30 percent last year, compared with an 18 percent drop in the stock of Mitsubishi UFJ Financial Group Inc., Japan’s largest bank, which sold more than 1 trillion yen in new shares last year. Term Talks The bank is able to buy back “several hundreds of billions of yen” of preference shares, Hosoya said. Resona intends to buy back 400 billion yen in preference shares, the Nikkei newspaper reported today, without saying where it got the information. The government will probably set a price 10 percent higher than face value for the buyback, according to the Nikkei. Hosoya didn’t provide a spending target for buying back the government-held preferred shares. “If the premium is about 10 percent, we would judge that positively,” Hironari Nozaki , a Tokyo-based analyst at Citigroup Inc., said in a report today. No agreement has been made reached on the size, timing and terms to buy back shares, Resona said in a statement today. The timing, price and terms of a share sale haven’t been considered in detail, an official at the Deposit Insurance Corp. said. Under former Prime Minister Junichiro Koizumi , the government injected 1.96 trillion yen into Resona in 2003 after its capital fell below minimum regulatory requirements. Koizumi tapped Hosoya, then vice president of East Japan Railway Co., to turn around the bank. The government holds a 67 percent voting stake. To contact the reporter on this story: Finbarr Flynn in Tokyo at fflynn3@bloomberg.net ; Takako Taniguchi in Tokyo at ttaniguchi4@bloomberg.net

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Japanese, Australian Stocks Fall in New York on Deficit, Credit Concern

April 22, 2010

By Masaki Kondo and Satoshi Kawano April 23 (Bloomberg) — Japanese and Australian stocks dropped in New York after Japan’s prospects for a credit downgrade and the euro area’s widening deficit raised concern the global economic recovery will falter. American depositary receipts of Sumitomo Mitsui Financial Group Inc. finished 1.4 percent lower from the Tokyo close after Fitch Ratings signaled concern mounting debt will hurt Japan’s creditworthiness. ADRs of Amcor Ltd., an Australian packaging company that gets 27 percent of its revenue in Europe, sank 0.3 percent after the euro region reported a wider budget deficit. Receipts for Honda Motor Co. rose 1.4 percent after the Nikkei newspaper said the Japanese carmaker’s earnings increased. “Investors are jittery about huge budget shortfalls, which are deterring governments from offering further stimulus,” said Juichi Wako , a senior strategist at Tokyo-based Nomura Holdings Inc. “Expectations for good earnings are growing and people appear to have a strong appetite for bargain hunting.” The Bank of New York Mellon Asia ADR Price Index, which tracks American depositary receipts of the region’s companies, was little changed yesterday. Yen-denominated futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 10,915 in Chicago yesterday, 0.3 percent lower than 10,950 in Singapore. They were bid in the pre-market at 10,900 as of 8:05 a.m. in Osaka, Japan. The Nikkei 225 closed at 10,949.09 yesterday. Futures on Australia’s S&P/ASX 200 Index rose 0.1 percent. New Zealand’s NZX 50 Index advanced 0.3 percent. Relative Valuations The MSCI Asia Pacific Index has slipped 1.5 percent in the past four days, en route for its first weekly retreat this month, after the U.S. Securities and Exchange Commission sued Goldman Sachs Group Inc. for misstating and omitting facts about collateralized-debt obligations. Stocks in the gauge trade at 16.1 times estimated earnings, compared with 14.7 times for the MSCI World Index of 23 developed nations. Futures on the Standard & Poor’s 500 Index were little changed. The gauge advanced 0.2 percent in New York yesterday as President Barack Obama offered no new policy proposals to crack down on the financial industry. In his speech at New York’s Cooper Union college, Obama called on the financial industry to drop its “furious efforts” to fight his regulation plan, saying a failure to impose tougher rules on the market will put the economy at risk. Fitch said yesterday that Japan’s swelling debt burden may put “downward pressure” on the nation’s sovereign AA-rating. Meanwhile, Moody’s Investors Service reduced its rating on debt- stricken Greece by one level to A3. The European Union’s statistics office said yesterday the total budget shortfall for the 16-nation euro region widened to 6.3 percent of gross domestic product last year, the widest since the introduction of the euro in 1999. Honda’s operating profit probably swelled 90 percent to 360 billion yen ($3.85 billion) for the year ended March 31, helped by “strong” demand in emerging markets, the Nikkei newspaper reported, without saying how it got the information. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Satoshi Kawano in Tokyo skawano1@bloomberg.net .

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Japanese Stocks Rise on Economic View Report, Yen Depreciation; JFE Drops

March 10, 2010

By Masaki Kondo March 11 (Bloomberg) — Japanese stocks rose after the Nikkei newspaper reported the government may lift its view on the nation’s economy and the yen depreciated. Sony Corp. , which gets 22 percent of its sales from the U.S., advanced 2.4 percent. Kawasaki Kisen Kaisha Ltd., Japan’s No. 3 shipping line, rose 1.4 percent after the Nikkei said its container-ship business may have a narrower loss. JFE Holdings Inc., the nation’s second-biggest steelmaker, fell 1.9 percent after the Nikkei said Vale SA sought to raise iron-ore prices. “The economy is undoubtedly in the midst of mild recovery,” said Mitsushige Akino , who oversees the equivalent of $450 million at Tokyo-based Ichiyoshi Investment Management Co. “Manufacturers’ earnings are improving thanks to the resilience of emerging economies.” The Nikkei 225 Stock Average climbed 0.7 percent to 10,638.13 as of 9:06 a.m. in Tokyo. The broader Topix index rose 0.7 percent to 928.80 with almost six times as many shares gaining as falling. The Japanese government will probably upgrade its overall assessment on the nation’s economy for the first time since July, the Nikkei said today, without identifying its source of information. The report is expected to say the economy is making a “steady recovery” as rising exports to China drove growth in production, the newspaper said. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Australia Stocks Fluctuate; Japan Futures Gain on U.S. Production, Housing

February 17, 2010

By Masaki Kondo Feb. 18 (Bloomberg) — Australian stocks fluctuated, while Japan’s futures rose after U.S. industry production and housing starts exceeded economists’ estimates and the dollar strengthened versus the yen. James Hardie Industries NV, the biggest seller of home siding in the U.S., gained 0.9 percent in Sydney. Qantas Airways Ltd. sank 5.1 percent after first-half profit fell. New York- traded securities of Sony Corp. , which gets 22 percent of its sales from the U.S., climbed 0.7 percent from the Tokyo close. Those of Komatsu Ltd. , the world’s No. 2 maker of earthmoving equipment, advanced 1.7 percent after Nikkei English News said fourth-quarter earnings will probably double. Australia’s S&P/ASX 200 Index lost 0.1 percent to 4,665.30 as of 10:36 a.m. in Sydney, with six shares climbing for every five that fell. New Zealand’s NZX 50 Index dipped 0.1 percent. Yesterday, Australia’s gauge posted its biggest increase since Nov. 30. “It’s getting more evident that the U.S. economy will continue to recover,” said Mitsushige Akino , who oversees about $450 million at Tokyo-based Ichiyoshi Investment Management Co. “After yesterday’s surge, profit taking will weigh on the market.” Yen-denominated futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,365 in Chicago yesterday, 0.7 percent higher than 10,290 in Osaka. They were bid in the pre- market at 10,360 as of 8:28 a.m. in Osaka. In New York, the Standard & Poor’s 500 Index climbed 0.4 percent after a Federal Reserve report showed output at factories, mines and utilities increased 0.9 percent in January, more than economists had estimated. Housing starts last month also topped economists’ projections, a report from the Commerce Department showed. Dollar Strengthens The MSCI Asia Pacific Index has lost 6.9 percent from a 17- month high on Jan. 15 on concerns global growth may stall. China took steps to reduce bank lending that fueled economic expansion and Greece, Spain and Portugal were struggling to curb deficits. Stocks in the gauge trade at 1.5 times book value, compared with 2.2 times for the Standard & Poor’s 500 Index in the U.S. and 1.6 times for Europe’s Dow Jones Stoxx 600 Index. Qantas said today net income dropped 72 percent in the six months ended Dec. 31 as demand for international flights waned. The stock dropped 5.1 percent to A$2.82 in Sydney and was the third-heaviest drag on the S&P/ASX 200 Index. The dollar strengthened against 13 of the 16 major currencies tracked by Bloomberg. Fed officials unanimously agreed its assets and banks’ excess cash will need to shrink “substantially over time” and return the central bank’s holdings to Treasuries, minutes of the Jan. 26-27 Federal Open Market Committee meeting showed. Komatsu Climbs The dollar appreciated against the yen to 91.28 today from 90.30 at the 3 p.m. close of Tokyo stock trading. A stronger dollar boosts the value of overseas sales at Japanese companies when converted into their home currency. Komatsu may have an operating profit of 36 billion yen ($395 million) in the quarter to March 31, more than doubling from the previous quarter, the Nikkei reported, citing Chief Financial Officer Kenji Kinoshita . Demand in China is boosting the company’s earnings, the Nikkei said. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Shinsei, Aozora Banks Call Off Merger on Strategy Differences, Nikkei Says

February 12, 2010

By Michael J. Moore and Finbarr Flynn Feb. 13 (Bloomberg) — Shinsei Bank Ltd. , the Japanese lender partly owned by U.S. investor Christopher Flowers , and Aozora Bank Ltd. have called off their merger after failing to agree on a business strategy, Nikkei English News reported. The deal, which the two Tokyo-based banks valued at $5.9 billion last July, will either be abandoned or postponed indefinitely, Nikkei reported, without saying how it got the information. Shinsei will work on a capital-raising plan while Aozora will seek alliances with local banks, Nikkei said. The banks agreed in July to merge after they posted a combined annual loss of $4.2 billion on soured investments in overseas bonds, hedge funds and U.S. mortgage assets. Aozora Chief Executive Officer Brian Prince said in a Jan. 15 interview that “areas of disagreement” had arisen in the talks. A Credit Suisse Group AG analyst said in a report this week that the merger planned for October may be called off. Combining Shinsei and Aozora , controlled by New York-based Cerberus Capital Management LP, would have created Japan’s sixth-largest listed lender with about 190 billion yen ($2.1 billion) in assets. Shinsei, which has fallen 34 percent on the Tokyo Stock Exchange since the deal was announced on July 1, declined 1.9 percent to 104 yen yesterday. Aozora, down 28 percent since July 1, was unchanged yesterday at 109 yen. Shinsei Chief Executive Officer Masamoto Yashiro , who returned to lead the bank in November 2008, told investors on Feb. 4 he aimed to “clean up” unprofitable investments on its books. Shinsei’s Forecast Shinsei posted profit of 22.3 billion yen for the nine months ended Dec. 31. The bank reiterated its full-year net income forecast of 10 billion yen, citing the potential for impairments and charges on real estate, consumer lending and other assets. Aozora last month raised its full-year profit forecast to 7 billion yen on higher fees and fewer costs for bad loans. The bank posted net income of 7.3 billion yen in the nine months ended Dec. 31, compared with a loss of 109.4 billion yen a year earlier. The two companies were created from failed long-term credit banks that were nationalized in 1998 after becoming insolvent. Flowers first invested in Shinsei’s forerunner in 2000. Cerberus took a controlling stake in Aozora in 2003. Flowers had “strongly requested” the merger, Yashiro said in July. Flowers didn’t return a call for comment. To contact the reporters on this story: Michael J. Moore in New York at mmoore55@bloomberg.net ; Finbarr Flynn in Tokyo at fflynn3@bloomberg.net .

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Japan Stocks Fall, Sending Nikkei Down 10% From January Peak; Nikon Drops

February 8, 2010

By Masaki Kondo Feb. 9 (Bloomberg) — Japanese stocks fell, driving the Nikkei 225 Stock Average down 10 percent from its peak in January, on renewed concern ballooning budget deficits will worsen Europe’s economy. Nikon Corp., a camera maker that gets 25 percent of its sales from Europe, lost 1.9 percent. Toshiba Corp., the nation’s biggest supplier of nuclear reactors, fell 1 percent after the Nikkei newspaper said the company and its partners lost a bid for Vietnam’s power project. Sumitomo Mitsui Financial Group Inc. jumped 1 percent after posting higher-than-estimated earnings. The Nikkei 225 Stock Average declined 0.5 percent to 9,905.57 as of 9:08 a.m. in Tokyo. The broader Topix index fell 0.4 percent to 879.41. The Nikkei opened at 9,876.61, compared with this year’s high of 10,982.10 reached on Jan. 15. A 10 percent decline from a recent peak is a so-called correction. “Investors are concerned budget deficits will trigger a slowdown in Europe’s economy and that will spread worldwide,” said Fumiyuki Nakanishi , a senior strategist at SMBC Friend Securities Co. “People are looking not into earnings but into the global economy and selling Japanese shares. We have no strong catalyst for individual stocks that can resist a decline in the broad market.” Credit-default swaps, or the cost of insuring against losses on sovereign debt, for Spain and Portugal jumped to a record, according to CMA DataVision. Those for Greece also hovered around an all-time high. The costs were driven up amid concern those nations’ governments will not be able to impose spending cuts to reduce budget deficits. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Japan Stocks Fall, Sending Nikkei Down 10% From January Peak; Nikon Drops

February 8, 2010

By Masaki Kondo Feb. 9 (Bloomberg) — Japanese stocks fell, driving the Nikkei 225 Stock Average down 10 percent from its peak in January, on renewed concern ballooning budget deficits will worsen Europe’s economy. Nikon Corp., a camera maker that gets 25 percent of its sales from Europe, lost 1.9 percent. Toshiba Corp., the nation’s biggest supplier of nuclear reactors, fell 1 percent after the Nikkei newspaper said the company and its partners lost a bid for Vietnam’s power project. Sumitomo Mitsui Financial Group Inc. jumped 1 percent after posting higher-than-estimated earnings. The Nikkei 225 Stock Average declined 0.5 percent to 9,905.57 as of 9:08 a.m. in Tokyo. The broader Topix index fell 0.4 percent to 879.41. The Nikkei opened at 9,876.61, compared with this year’s high of 10,982.10 reached on Jan. 15. A 10 percent decline from a recent peak is a so-called correction. “Investors are concerned budget deficits will trigger a slowdown in Europe’s economy and that will spread worldwide,” said Fumiyuki Nakanishi , a senior strategist at SMBC Friend Securities Co. “People are looking not into earnings but into the global economy and selling Japanese shares. We have no strong catalyst for individual stocks that can resist a decline in the broad market.” Credit-default swaps, or the cost of insuring against losses on sovereign debt, for Spain and Portugal jumped to a record, according to CMA DataVision. Those for Greece also hovered around an all-time high. The costs were driven up amid concern those nations’ governments will not be able to impose spending cuts to reduce budget deficits. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Sony May Raise Full-Year Earnings Forecast After Holiday Shoppers Return

February 3, 2010

By Mariko Yasu and Maki Shiraki Feb. 4 (Bloomberg) — Sony Corp. may raise its full-year earnings forecast today after reducing costs and consumer demand for televisions and game consoles started to recover during the holiday shopping season. The maker of Bravia televisions and Cyber-shot cameras will probably report a net loss of 55 billion yen ($605 million) in the year ending March 31, according to the median of nine analyst estimates this year compiled by Bloomberg. That’s 42 percent less than Sony’s Oct. 30 projection for a 95 billion yen shortfall. “There’s a strong likelihood the company will raise its earnings forecasts based on robust business in the third quarter,” Yuji Fujimori , a Tokyo-based analyst at Barclays Capital, said yesterday by telephone. “Year-end sales were good” and Sony also improved its efforts to cut costs and reduce inventory, he said. Tokyo-based Sony, forecasting its first back-to-back annual losses since its listing in 1958, attracted holiday shoppers after cutting the price of its flagship game console, PlayStation 3, by 25 percent in August. Chief Executive Officer Howard Stringer has drawn closer to his target of cutting 330 billion yen in costs by eliminating 20,000 jobs . The full-year operating loss, or sales minus the cost of goods sold and administrative expenses, may be 37 billion yen, according the median of 10 analyst estimates since early January compiled by Bloomberg. That’s 38 percent smaller than Sony’s 60 billion yen projection. The Japanese company is set to announce third-quarter results at 3 p.m. in Tokyo today. Record U.S. Sales In December, Sony and Nintendo Co. led the U.S. video-game market to monthly record sales of $5.53 billion, researcher NPD Group Inc. said last month. The two companies lowered prices of their flagship players, helping fuel demand in what was the best holiday season yet for the consoles. Sony fell 1 percent to 3,115 yen as of 9:13 a.m. in Tokyo yesterday, while Japan’s benchmark Nikkei 225 Stock Average added 0.2 percent. The stock , which gained 39 percent in 2009, has risen 17 percent this year. “Sales in the October-December quarter seem better than Sony’s conservative assumptions,” said Nobuo Kurahashi , an analyst at Mizuho Financial Group Inc. in Tokyo. “Both Sony’s estimates for operating profit and net profit could be raised.” Sony gained the most in almost two months in Tokyo trading on Jan. 28 after the Nikkei newspaper reported the company may have returned to operating profit in the quarter ended Dec. 31. Sony may report a group operating income of about 100 billion yen after its game business posted a quarterly profit, Nikkei said, without saying how it got the information. Second Forecast Revision The company in October reduced its 12-month net loss forecast by 21 percent and cut its projection for operating loss for the year by 45 percent to 60 billion yen. The company at the time maintained its prediction for a 5.6 percent decline in annual sales to 7.3 trillion yen. The analysts’ estimate is for revenue of 7.16 trillion yen. Samusung Electronics Co. , the world’s largest TV maker, last week reported net income of 3.05 trillion won ($2.7 billion) for the three months ended Dec. 31, swinging from a loss of 22 billion won a year earlier, as demand for TVs rose. Improving consumer confidence is spurring sales of liquid- crystal-display TVs . Global shipments of LCD TVs will rise 22 percent to 171 million units in 2010, Austin, Texas-based research firm DisplaySearch said Dec. 29. Sharp Corp., Japan’s largest maker of LCD panels, turned to profit in the third quarter helped by lower expenses including labor costs. Net income was 9.1 billion yen in the three months ended Dec. 31, compared with a loss of 65.8 billion yen a year earlier, the Osaka-based company said yesterday. To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net .

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Asian Stocks Rise for First Time in Nine Days on Canon Outlook; Sony Gains

January 27, 2010

By Shani Raja Jan. 28 (Bloomberg) — Asian stocks rose for the first time in nine days, led by electronics and technology companies, after Canon Inc. forecast its biggest profit increase in a decade. Canon , a Japanese camera maker, rose 2.2 percent. Sony Corp. and Honda Motor Co. jumped more than 5 percent after the Nikkei newspaper flagged improved profitability at the two companies. Macarthur Coal Ltd. added 2.9 percent in Sydney after its share- price estimate was raised at Royal Bank of Scotland Group Plc. The MSCI Asia Pacific Index added 0.3 percent to 118.48 at 10:38 a.m. in Tokyo, with five stocks rising for every two that dropped. The gauge sank 6.9 percent in the past eight days as U.S. President Barack Obama proposed measures to limit risk taking at banks and concern grew China will rein in growth. The index is still 42 percent higher than a year ago. “Some companies are telling us they’re seeing signs of improvement,” said Hugh Dive , who helps manage about $3.5 billion at Investors Mutual Ltd. in Sydney. “Still, markets have run a bit ahead of themselves and many investors are starting to realize that the recovery is going to be a bit slower and more protracted than they might have expected.” Japan’s Nikkei 225 Stock Average gained 1.4 percent. Australia’s S&P/ASX 200 Index rose 0.3 percent. South Korea’s Kospi gained 0.6 percent, while Taiwan’s Taiex added 1.4 percent. Among stocks that fell today, Toyota Motor Corp. fell 2.3 percent in Tokyo after saying it will expand a vehicle recall to Europe. Woolworths Ltd. , Australia’s biggest retailer, sank 2.7 percent as UBG AG downgraded the stock. Canon, Honda Futures on the Standard & Poor’s 500 Index added 0.4 percent. The gauge gained 0.5 percent yesterday as the Federal Reserve reiterated a pledge to keep rates low “for an extended period” and Apple Inc. announced a tablet computer that costs half what some analysts estimated. Canon, the world’s biggest camera maker, rose 2.2 percent to 3,695 yen after saying yesterday net income will probably jump 52 percent this year. Sales are expected to rise 7.5 percent in the period, the company said. Honda, Japan’s No. 2 carmaker, added 5.6 percent to 3,210 yen. It will likely post an operating profit of more than 300 billion yen ($3.3 billion) for the year to March, compared with its 190 billion yen forecast, Nikkei English News reported. Sony, a Japanese maker of consumer electronics, jumped 5.1 percent to 3,090 yen. The company may report an operating profit of 100 billion yen in the three months ended December, the first profit in five quarters, Nikkei said. Japanese exporters gained as the yen depreciated to 90.26 today against the dollar from 89.14 yesterday. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency. Toyota fell 2.3 percent to 3,620 yen in Tokyo after saying yesterday it will expand a vehicle recall to Europe. That came a day after announcing it would suspend the sale and production of models that account for more than half its U.S. deliveries. In Sydney, Woolworths sank 2.7 percent to A$26.07. UBS cut its share-price estimate to A$32.50 from A$33.50. To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net .

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Yen Falls as Hatoyama Says Japanese Currency’s Strength Must Be Dealt With

December 2, 2009

By Lukanyo Mnyanda Dec. 2 (Bloomberg) — The yen fell after Japanese Prime Minister Yukio Hatoyama was cited by the Nikkei newspaper as saying the currency’s strength can’t be left as it is, fueling speculation the central bank will intervene to stem its gains. Japan’s currency headed for its first back-to-back losses in two weeks against the dollar following the Nikkei report. Chief Cabinet Secretary Hirofumi Hirano said later Hatoyama wasn’t suggesting the government is ready to intervene. The dollar traded near a 16-month low versus the euro and fell against higher-yielding currencies as stock markets rose. “They are very much concerned about yen strength, and the market is quite aware that the Bank of Japan will likely intervene if the yen appreciates too much,” said Lutz Karpowitz , a currency strategist in Frankfurt at Commerzbank AG, Germany’s second-largest lender. “Risk appetite is also driving the market at the moment and the dollar will also be under pressure due to the low financing costs.” The yen dropped 0.6 percent to 87.22 per dollar as of 8:24 a.m. in London. It declined 0.7 percent to 131.69 per euro. The dollar fell 0.2 percent to $1.5088. It depreciated to $1.5144 on Nov. 25, the weakest level since August 2008. The yen has advanced 3.8 percent versus the dollar this year and traded at a 14-year high of 84.83 against the U.S. currency on Nov. 27. Rapid fluctuations in the currency market are undesirable and the government is closely monitoring the situation, Hirano told reporters in Tokyo following Hatoyama’s comments. Aussie Dollar The yen fell against all its 16 most-traded peers tracked by Bloomberg, including the Australian and New Zealand dollars. Australia’s currency, the Aussie, rose as gold, the nation’s third most-valuable raw material export, advanced to a record for a second day, trading at $1,215.85 an ounce. The Aussie rose 0.9 percent to 80.92 yen and was up 0.3 percent against the dollar at 92.78 cents. The New Zealand dollar gained 1 percent to 63.53 yen and strengthened 0.3 percent to 72.81 cents. The dollar also declined before a report economists said will show U.S. employers fired fewer workers last month, giving investors confidence to buy assets that offer higher returns. Benchmark interest rates are 3.75 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan and as low as zero in the U.S., attracting investors to the South Pacific nations’ higher-yielding assets. The risk in such trades is that currency market moves will erase profits. Stocks Rise Most European stocks advanced, with the Dow Jones Stoxx 600 Index adding 0.1 percent, after jumping 2.7 percent yesterday. The MSCI World Index headed for a third day of increases. U.S. companies cut 150,000 jobs in November, down from 203,000 in October, according to the median estimate of economists in a Bloomberg News survey before today’s report from ADP Employer Services. That would be the smallest reduction since July 2008. “The global recovery is in motion,” said Adam Carr , senior economist at ICAP Australia Ltd. in Sydney. “A stronger employment report, of course, will lead to an increase in risk appetite, and we will probably see that weigh heavily on the U.S. dollar.” The euro rose against the yen as European finance leaders played down potential risks to their banks from Dubai’s debt problems. Government-related Dubai World has begun talks with banks to restructure $26 billion of debt. The risk of losses for “European banks seems to be so far, from what we can assess, at a reasonable level,” Finance Minister Anders Borg of Sweden, which holds the rotating European Union presidency, said yesterday as he arrived for a meeting of finance chiefs in Brussels. To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net

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American Peso Leaves Yen Nowhere to Go But Up: William Pesek

November 30, 2009

Commentary by William Pesek Nov. 30 (Bloomberg) — It’s hard to keep a straight face as economists in Tokyo gush over a bit of growth. Japan expanded an annualized 4.8 percent from July to September. Never mind that growth is still down 4.5 percent year-over-year. Or that exports plunged 23.2 percent in October. Or that Tokyo is awash in high-rise construction projects it doesn’t need. Recovery is said to be afoot. Not quite, and three inconvenient facts buttress this skepticism. One, the strong yen. Two, deflation’s return . Three, the new government’s solution to both challenges is as futile as the last one’s. No wonder some analysts see the Nikkei 225 Stock Average soon sliding to 8,000. Why shouldn’t stocks fall when politicians blame the Bank of Japan for deflation and the central bank points the finger right back at them? The yen’s surge greatly complicates things. It means the government and the BOJ need to work together to stop prices from falling, and they’re not. It’s bad news for investors. The BOJ does have a point. For 15 years now, politicians have called on the central bank to do more. Zero interest rates? Not enough, politicians screamed. Quantitative easing? Not impressed. Channeling funds to businesses as global growth plunges? Yawn. All government officials have done is pour untold trillions of yen into public works projects that produced an army of white elephants. Other than unneeded dams, bridges and a public debt nearly twice the size of its $4.9 trillion economy, Japan has little to show for it. Going Further It’s time for the government to meet the BOJ halfway. The key isn’t just being bold, but trying something different. Yukio Hatoyama’s Democratic Party of Japan, in power since September, is tweaking policies to give more financial support to households. Yet Prime Minister Hatoyama’s economic team is already leaning on the BOJ to do more. Finance Minister Hirohisa Fujii called on the central bank to respond to the deflation threat. So did Financial Services Minister Shizuka Kamei . A look in the mirror would help. It’s bizarre, for example, that Japanese officialdom is focused on raising consumption taxes to pay off debt. The reason for all that debt is a lack of consumer demand. In what alternative universe do they think higher taxes will reverse things? Let’s try lower taxes instead. Supply-side economics is a dubious thing, but it’s time Japan encouraged small businesses to create new jobs, boost productivity and raise incomes. Something Different Why do the same things over and over again when they aren’t working? Here, Richard Jerram , chief economist at Macquarie Securities Ltd. in Tokyo, suggests a money-funded tax cut. The government would send households a check, issue debt to fund it and ask the BOJ to buy it and hold it in perpetuity. That might be too radical for some in Tokyo. Yet we need a clean break with the discredited policies of the past. All the concrete Japan pours into rural areas is merely a Band Aid at a time when competitiveness is hemorrhaging amid China’s rise. There’s no time to waste as many fear renewed credit-market turmoil. A proposal last week by property developer Dubai World, with $59 billion of liabilities, to delay debt payments shook global markets. Dubai may be the latest example of the uncanny correlation between efforts to build the world’s tallest building and financial crises. Rickety Model The world has another bubble in the strong yen. On Friday, Fujii said he may contact the U.S. and Europe to act as the yen trades at 14-year highs. Yet intervention would do little. With the dollar trading like an American peso, it’s not clear what authorities can really do here. While the Ministry of Finance is obsessing over exchange rates, it’s not rethinking a rickety economic model. And even if the yen falls, the global demand isn’t there for Japan to export its way to stability. You can bet ugly deflation numbers in the months ahead will preoccupy Fujii and Kamei, just as price data have with previous governments. Sadly, policy makers here see deflation as THE problem as opposed to a symptom of a bigger one. Those “animal spirits” of which John Maynard Keynes spoke can be cagey. Many Japanese don’t spend more because they lack confidence in the future. The rise of developing Asia complicates the extent to which human emotion and behavior confounds policy makers. Yen Bears Beware Next year, China’s economy may surpass Japan’s to become Asia’s biggest. It’s a disorienting time, and it doesn’t help that Japan’s leaders are merely rearranging the deck chairs on a ship that’s lost power. That sinking feeling among households is a key cause of deflation. So is a financial system that still hasn’t fully recovered from the collapse of the 1980s bubble economy. The BOJ can print all the yen it wants. It’s just going to end up in government bonds, not fueling fresh lending and job growth. The same old cycle is churning away as we speak. Breaking it requires a new playbook — a different way of looking at old and ingrained problems. In the case of deflation, there’s no evidence one is emerging. That bodes poorly for Nikkei bulls and yen bears in the months ahead. ( William Pesek is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: William Pesek in Tokyo at wpesek@bloomberg.net

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Start of the Next Downturn?

November 27, 2009

Previous Video: The Good Entrepreneur Winner Next Video: The Nikkei Business Report Airtime: ET Dubai’s debt delay problems could prove to be a break point for the next downturn, Clive Hyman from Hyman Capital Services told CNBC Friday. Hyman advises

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Euro Advances Versus Yen as Economic Recovery Signs Boost Demand for Risk

November 15, 2009

By Yoshiaki Nohara and Ron Harui Nov. 16 (Bloomberg) — The euro rose for a second day against the dollar as signs the worldwide economy is recovering boosted demand for higher-yielding assets. The euro gained against 13 of its 16 most-active counterparts as Japan’s gross domestic product expanded for a second-consecutive quarter. The Australian dollar traded near the strongest in 15 months against the greenback after gains in U.S. stocks added to signs the economic recovery is gathering momentum, backing the case for the Reserve Bank of Australia to raise rates again next month. “The GDP data were much stronger than expected, boosting risk appetite,” said Yuji Saito , head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “The bias is for the yen and the dollar to be sold to buy higher-yielding currencies.” The euro rose to $1.4948 at 10:12 a.m. in Tokyo from $1.4903 in New York on Nov. 13. Europe’s currency traded at 133.76 yen from 133.63 yen, after earlier rising to 134.12 yen. The dollar fetched 89.48 yen from 89.66 yen. Australia’s dollar was at 93.27 U.S. cents from 93.30 cents. It touched 93.70 cents on Nov. 12, the strongest since Aug. 1, 2008. Japan’s gross domestic product expanded at an annual 4.8 percent pace in the third quarter, the Cabinet Office reported today in Tokyo, compared with the median economist estimate for 2.9 percent growth. That was up from a revised 2.7 percent expansion in the three months ended June 30. The 21-member Asia-Pacific Economic Cooperation group, representing 54 percent of the global economy, pledged in a statement over the weekend to “refrain from raising new barriers” to investment and trade. They didn’t mention currency distortions, which U.S. companies say give China unfair trade advantages. Losses in the yen were tempered as the Nikkei 225 Stock Average fell 0.3 percent after rising as much as 0.3 percent. The euro-yen had a correlation of 0.82 with the Nikkei 225 in the past year, according to data compiled by Bloomberg. A reading of 1 would mean the two moved in lockstep. To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net ; Ron Harui in Singapore at rharui@bloomberg.net

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Japan Air’s Fourth State Bailout to Be Decided in 2010 After Panel Review

November 9, 2009

By Chris Cooper and Kiyotaka Matsuda Nov. 10 (Bloomberg) — Japan Airlines Corp. ’s application for financing from a state-affiliated fund won’t be decided upon before next year, the lender’s president said, prolonging the carrier’s bid to avoid collapse. “Due diligence won’t be quick,” Hiroshige Nishizawa , president of Enterprise Turnaround Initiative Corp. of Japan, said in an interview in Tokyo yesterday. “We’re not going to be able to make a decision on whether to provide aid by the end of this year.” The group will also draw up a new plan for the carrier, instead of relying on one completed by a government-appointed taskforce last month, Nishizawa said. JAL is seeking state support as it heads for its fourth loss in five years on plunging international travel. The due-diligence team will be decided upon “soon,” said Nishizawa, a former head of Tokyo Tomin Bank Ltd. Enterprise Turnaround was set up last month by the government and private companies with 1.6 trillion yen ($18 billion) to help restructure companies and buy assets. JAL fell 2.8 percent to 106 yen in Tokyo trading yesterday. The stock has slumped 50 percent this year, the biggest decliner in the Nikkei 225 Stock Average. The government created a taskforce to develop a plan for JAL after the transport minister said President Haruka Nishimatsu’s proposal to cut 6,800 jobs and slash routes didn’t go far enough. The carrier , predicting a loss of 63 billion yen this fiscal year, is due to announce first-half earnings on Nov. 13. To contact the reporters on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net ; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

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Video: Honda Hits By Stronger Yen

October 26, 2009

Shares are down and Honda forecasts a loss in its fiscal fist half; Demand still rises on other nations specifically China, India and South America; Nikkei says the bikes are Honda’s biggest bread winner. (The Trade)

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Asian Stocks Fall on China Mobile, China Telecom Profit; Samsung Declines

October 20, 2009

By Masaki Kondo and Patrick Rial Oct. 21 (Bloomberg) — Asian stock s fell for the first time in three days, led by technology and material shares, as China Mobile Ltd. and China Telecom Corp.’s profit disappointed some investors and oil prices dropped. The dollar rose. China Mobile , the world’s biggest phone carrier by market value, and China Telecom , the nation’s biggest fixed-line phone carrier, lost more than 1.3 percent in Hong Kong. Cnooc Ltd. , China’s largest offshore oil producer, fell 1.6 percent as the Wall Street Journal reported the company’s nine-month profit slumped. Samsung Electronics Co. retreated 2 percent in Seoul after AT&T Inc. sued the company and other liquid-crystal- display makers for collusion to fix prices. The MSCI Asia Pacific Index lost 0.3 percent to 120.87 as of 2:24 p.m. Tokyo time. The gauge has surged 71 percent from a five-year low on March 9 amid signs the global economy is rebounding from the worst slowdown since World War II. The index sank by a record 43 percent in 2008. “Investors haven’t forgotten the nightmare we had last year and are quick to sell when they get anxious,” said Kiyoshi Ishigane , a strategist at Mitsubishi UFJ Asset Management Co., which oversees about $56 billion. “Company profits are gradually returning, but we need to discern whether the stock price already reflects the improvement or not.” Japan’s Nikkei 225 Stock Average was little changed, while the Hang Seng Index dropped 0.1 percent in Hong Kong. South Korea’s Kospi Index declined 0.2 percent as Samsung SDI Co. , the world’s second-largest maker of lithium-ion rechargeable batteries, slumped 3.1 percent on brokerage downgrades. Toshiba Recommendation Among stocks that rose today, Toshiba Corp. , the world’s No. 2 maker of flash-memory chips, gained 3.6 percent in Tokyo after CLSA Ltd. recommended the shares. Japan Airlines Corp. , Asia’s biggest carrier, jumped 6.8 percent after the Nikkei newspaper said a government panel proposed more funding. Futures on the Standard & Poor’s 500 Index were little changed. The gauge sank 0.6 percent yesterday after a Commerce Department report showed housing starts rose 0.5 percent in September, missing economists’ estimates. The dollar strengthened amid lower demand for higher- yielding assets. The dollar traded at $1.4898 per euro from $1.4945 in New York yesterday, when it touched $1.4994, the weakest level since August 2008. The yield on 10-year Treasuries fell one basis point to 3.33 percent. China Mobile fell 1.3 percent to HK$77.70 in Hong Kong. Third-quarter net income rose 2.6 percent to 28.6 billion yuan ($4.2 billion), compared with the 29 billion yuan anticipated by analysts in a Bloomberg News survey. China Mobile Profit “It will be very tough for people to get very excited about this set of results,” said Wendy Liu , who rates China Mobile shares “hold” at Royal Bank of Scotland Group Plc in Hong Kong. “Is a 2 percent increase that much different from a 2 percent decline? It will be tough for people to say they have turned around a corner.” China Telecom fell 1.8 percent to HK$3.75 after its third- quarter net income tumbled 47 percent to 2.98 billion yuan, missing the 3.16 billion yuan expected by analysts. Cnooc lost 1.6 percent to HK$12.26 as crude oil futures in New York declined 0.6 percent to $78.65 a barrel in after-hours trading. The company’s nine-month pretax profit fell 46 percent from a year earlier on lower oil prices, the Wall Street Journal reported. Oil futures are at about half the intraday record of $147.27 reached in July 2008. BHP Billiton Ltd. , Australia’s largest oil producer and the world’s largest mining company, dropped 1 percent to A$39.52. The London Metals Index, a measure of six metals including copper and zinc, fell 1 percent yesterday, retreating from a two-month high. Liquid Crystal Display Samsung, the world’s biggest maker of liquid-crystal displays, lost 2 percent to 737,000 won. LG Display Co. dropped 0.3 percent to 32,800 won, while Taiwan’s AU Optronics Corp. slid 2 percent to NT$32.05. AT&T, the biggest U.S. phone carrier, filed a complaint in federal court, claiming the companies were among those that “formed an international cartel illegally to restrict competition” in the LCD market in the U.S. “The material impact on the panel stocks may be limited, since the lawsuit can drag on for several years,” said Bevan Yeh , who helps manage about $1.2 billion at Prudential Financial Securities Investment Trust Enterprise in Taipei. “It’s inevitable that there will be some knee-jerk reaction.” Better-than-estimated economic and earnings figures have driven the MSCI Asia Pacific Index’s seven-month rally. Stocks in the gauge are priced at 23 times estimated earnings, compared with an average of 18 times in the past three years. Central Bank Action This month, reports showed the U.S. service industries grew for the first time in a year and an export decline slowed in China. Amid signs the global economy is strengthening, Australia’s central bank unexpectedly raised its benchmark rate on Oct. 6 and has signaled further increases in coming months. The U.S. housing report from yesterday helped drag down Nissan Motor Co. , which counts North America as its biggest market, by 1.6 percent to 662 yen. Advantest Corp., the world’s biggest maker of memory-chip testers, sank 1.8 percent to 2,400 yen. James Hardie Industries NV , the biggest seller of home siding in the U.S., lost 0.7 percent to A$7.52 in Sydney. In Seoul, Samsung SDI fell 3.9 percent to 137,000 won. Daishin Securities Co. and Meritz Securities Co. downgraded the stock even after the company reported a 48 percent surge in third-quarter earnings. Toshiba gained 3.6 percent to 544 yen in Tokyo. CLSA raised its investment rating on the stock to “buy” from “underperform,” citing rebounding demand for flash memory. Japan Airlines jumped 5.9 percent to 125 yen, the sharpest gain in the Nikkei 225. A government panel recommended the airline receive 300 billion yen ($3.3 billion) in private and public funds, more than an earlier proposal for 150 billion yen, the Nikkei newspaper reported. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Patrick Rial in Tokyo at prial@bloomberg.net .

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Asian Stocks Rise on Profit Growth Speculation; China Yurun, Elpida Gain

September 9, 2009

By Patrick Rial and Masaki Kondo Sept. 10 (Bloomberg) — Asian stocks climbed, sending the MSCI Asia Pacific Index to the highest in a year following gains in U.S. markets amid speculation earnings will pick up as the global economy recovers. Westfield Group , the world’s largest owner of shopping centers, jumped 2.1 percent. Toyota Motor Corp., the No. 1 seller of automobiles globally, gained 2.4 percent. The Fed’s Beige Book showed 11 of its 12 regional banks reported signs of a stable or improving economy in July and August. Panasonic Corp. rose 2.9 percent after the Nikkei newspaper reported the company’s buyout of Sanyo Electric Co. The MSCI Asia Pacific climbed 0.9 percent to 116.62 as of 10:43 a.m. in Tokyo, headed for the highest close since Sept. 22, 2008. The gauge has gained 65 percent in the past six months on speculation the global economy is recovering. Stocks on the index are priced at an average 24 times estimated earnings, up from 14 times at the start of the year. “Speculators are buying because the momentum of the economic recovery is still strong and there’s no reason to sell,” said Mitsushige Akino , who oversees the equivalent of $652 million at Ichiyoshi Investment Management Co. in Tokyo. Japan’s Nikkei 225 Stock Average climbed 1.6 percent. South Korea’s Kospi Index added 1.3 percent. Taiwan’s Taiex Index gained 2.2 percent. Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The gauge climbed 0.8 percent yesterday to an 11-month high, as Goldman Sachs Group Inc. recommended industrial companies and investor Michael Price said he’s finding value in American equities. To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net ; Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Dainippon Agrees to Buy Sepracor for $2.6 Billion, Gaining U.S. Salesforce

September 2, 2009

By Kanoko Matsuyama and Tom Randall Sept. 3 (Bloomberg) — Dainippon Sumitomo Pharma Co. is close to an agreement to buy Sepracor Inc. to expand in the world’s biggest drug market, two people familiar with the transaction said. Dainippon may pay 250 billion yen ($2.7 billion) for Sepracor, gaining a U.S. sales force of 1,000 and experimental drugs, the Nikkei English News reported. The people didn’t provide a value for the acquisition. Osaka-based Dainippon will announce a takeover today, spokesman Nobuo Takeda said by telephone, declining to identify the target. Japanese pharmaceutical companies have spent more than $12 billion since 2008 buying U.S. rivals, taking advantage of the yen’s 26 percent gain against the dollar in the past two years to expand in the $291 billion U.S. prescription-drug market. Dainippon, a unit of Japan’s second-biggest chemical company, surged as much as 8.1 percent in Tokyo trading today. “The yen is very strong, and Japanese companies have been very active in this space,” Les Funtleyder , an analyst with Miller Tabak & Co. in New York, said by telephone. “It’s been pretty widely known that Sepracor has been shopping itself for a while. It’s a cheap company, on a valuation basis.” Marlborough, Massachusetts-based Sepracor rose the most in more than five years on the Nasdaq yesterday before trading in the stock was halted. Jonae R. Barnes , a company spokeswoman, didn’t immediately respond to a voice mail seeking comment after office hours. First U.S. Drug Dainippon, the drug unit of Sumitomo Chemical Co. , plans to submit its experimental schizophrenia treatment Lurasidone for U.S. regulatory approval in 2010. That would be the first drug sold in the U.S. by the company, which is also developing treatments for diabetes, hypertension, bronchial asthma and allergic rhinitis. The takeover target “is a company that will enable us to market Lurasidone most effectively,” spokesman Takeda said. “We have been considering options such as selling the drug by ourselves or granting the rights to other companies.” Sepracor is researching drugs including treatments for asthma, allergic rhinitis and insomnia, according to its Web site. Its experimental epilepsy drug, Stedesa, awaits a U.S. decision due by Jan. 30, 2010, while sales of the company’s biggest product, Lunesta, declined in 2008. “This is a good match,” Yasuhiro Nakazawa , an analyst at Mitsubishi UFJ Securities Co. in Tokyo, said by telephone. “Sepracor is strong in the areas of sleep disorders and respiratory ailments, which are Dainippon Sumitomo’s focus.” Takeover Plans Takeda Pharmaceutical Co. last year acquired Millennium Pharmaceuticals for $8.9 billion and Eisai Co. bought MGI Pharma Inc. for $3.9 billion. Drugmakers in Japan are looking for overseas expansion opportunities to cope with government- mandated price cuts in the domestic market. Dainippon Sumitomo’s net income dropped 22 percent to 20 billion yen in the year ended March 31. More than 90 percent of its 264 billion yen in full-year sales came from Japan. Sepracor’s net income jumped more than eightfold to $515 million last year, while revenue rose 5.5 percent to $1.3 billion. Prescription sales in the U.S. rose 1.3 percent to $291 billion last year, according to Norwalk, Connecticut-based research firm IMS Health Inc. in March. “This is quite an aggressive strategy,” Fumiyoshi Sakai , an analyst at Credit Suisse Group AG in Tokyo, said by telephone. “The biggest challenge will be whether Dainippon Sumitomo is able to make new medicines that sell well in the U.S. after Lurasidone.” Dainippon gained 3.2 percent to 1,045 yen as of 12:50 p.m. on the Tokyo Stock Exchange, after rising to as high as 1,095 yen, while the benchmark Nikkei 225 Stock Average slipped 0.2 percent. The stock has surged 25 percent this year, after adding 1.7 percent in 2008. Sepracor jumped 26 percent to $22.80 in Nasdaq Stock Market composite trading before trading was halted. To contact the reporters on this story: Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net ; Tom Randall in New York at trandall6@bloomberg.net .

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Asian Stocks Advance on Hon Hai Earnings, China Manufacturing; Rio Rises

August 31, 2009

By Patrick Rial and Masaki Kondo Sept. 1 (Bloomberg) — Asian stocks rose, led by technology and mining companies, after Hon Hai Precision Industry Co. reported greater-than-estimated earnings and China’s manufacturing expanded at the fastest pace in 16 months. Hon Hai Precision Industry Co., the world’s largest contract maker of electronics, climbed 5 percent in Taipei as Goldman Sachs Group Inc. raised its share-price target. Rio Tinto Group , the mining company that got 19 percent of its revenue in China last year, added 2 percent in Sydney. “China is seen as one of the few growing economies and it has influence over the commodity market because of its demand prospects,” said Yoji Takeda , who manages the equivalent of $1.1 billion at RBC Investment (Asia) Ltd. in Hong Kong. The MSCI Asia Pacific Index rose 0.3 percent to 113.76 as of 11:16 a.m. in Tokyo. Five shares advanced for every three that fell on the gauge. Speculation of a global economic recovery drove the index to the highest in more than 10 months on Aug. 14. The measure has lost 0.4 percent since then. China’s Shanghai Composite Index, which yesterday fell by the most since June 2008, added 0.2 percent. Hong Kong’s Hang Seng Index rose 0.7 percent. Japan’s Nikkei 225 Stock Average gained 0.5 percent. Nippon Sheet Glass Co. rose 3.4 percent after the Nikkei newspaper said solar glass sales are rising. Futures on the U.S. Standard & Poor’s 500 Index added 0.1 percent. The gauge dropped 0.8 percent yesterday amid concern the global rally in equities has outpaced the prospects for an economic recovery. The MSCI World Index sank 0.8 percent yesterday, the most since Aug. 17. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Japan’s Economy Expands Annualized 3.7%, Ending Worst Post-War Recession

August 16, 2009

By Jason Clenfield and Tatsuo Ito Aug. 17 (Bloomberg) — Japan’s economy grew last quarter as a global rebound helped the country climb out of its worst postwar recession. Gross domestic product expanded at an annual 3.7 percent pace in the three months ended June 30, following an 11.7 percent decline in the previous quarter, the Cabinet Office said today in Tokyo. The median estimate of 22 analysts surveyed by Bloomberg News was for 3.9 percent growth. The recovery may not be sustained once the $2 trillion in worldwide government stimulus that propped up sales for exporters from Toyota Motor Corp. to Kubota Corp. runs out. Some 40 percent of Japan’s factories still sit idle, forcing companies to cut costs and leaving the winner of an Aug. 30 election with the challenge of staving off unemployment that’s approaching a record high. “The growth we’re seeing is based on government spending and a rebound from the very low level in the previous quarter,” said Seiji Shiraishi , chief economist at HSBC Securities Japan Ltd. in Tokyo. “Companies are burdened with huge overcapacity in terms of equipment and people. It’s much worse than in previous recoveries.” Japan’s recovery hinges largely on its export markets, which are showing signs of stabilizing. A report last week showed the euro area contracted 0.1 percent last quarter, the region’s best performance in more than a year. The U.S. shrank at an annualized rate of 1 percent, the least in a year. China , Japan’s top overseas market, grew 7.9 percent from a year ago. Confidence in the world economy surged to a 22-month high in August, according to a Bloomberg survey of users on six continents. Optimism about Japan’s recovery has helped the Nikkei 225 Stock Average advance 50 percent since it touched a 26-year low on March 10. National Election Prime Minister Taro Aso’s ruling Liberal Democratic Party is likely to lose the lower house election to the opposition Democratic Party of Japan, which has never held power before. Some 43 percent of voters support the DPJ, almost double the 26 percent of those who support the LDP, a Nikkei Inc. and TV Tokyo Corp. poll released this month showed. Aso’s 25 trillion yen ($263 billion) in stimulus has lifted household confidence to its highest level since 2007. The packages, which include incentives to encourage the purchase of eco-friendly products, are the main reason Toyota is predicting its domestic sales will rise for the first time in five years. Emergency spending by governments worldwide has buoyed sales makers of cars and electronics, and companies including Nippon Steel Corp. are filling orders from manufacturers restocking inventories depleted during the recession. Kubota is selling more farming equipment in China. Lost Ground Bank of Japan Governor Masaaki Shirakawa said last week any recovery may not be strong and there’s no guarantee that demand for the country’s products and services will gain momentum. The central bank will keep the benchmark interest rate at 0.1 percent at least through 2010, according to economists surveyed by Bloomberg. Nippon Steel, the country’s biggest mill, this month restarted one of its idled furnaces to fill orders from makers of cars and electronics rebuilding inventories. The company is still running 25 percent below full capacity. Economists predict low production levels will drive the jobless rate to a record 5.8 percent next year from the current 5.4 percent. Japanese workers are also suffering unprecedented wage cuts that are likely to damp spending once the effect of the government’s stimulus package tapers off. Cost cuts by corporate Japan are taking a toll on companies such as Canon Inc. The nation’s biggest maker of office equipment last month forecast sales will drop 22 percent this year as clients limit spending on copiers and other business tools. To cope with that, Canon said it will pare its own expenses by 220 billion yen. To contact the reporter on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Tatsuo Ito in Tokyo at tito2@bloomberg.net

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Japan’s Bonds Rise, Completing Weekly Gain, on Concern Recovery to be Weak

August 14, 2009

By Theresa Barraclough Aug. 15 (Bloomberg) — Japan’s bonds rose for the first week in a month as central bank minutes showed policy makers may extend their emergency credit programs into next year. Benchmark 10-year yields yesterday fell for a fourth day after the minutes of the July 14-15 meeting showed the Bank of Japan was concerned some business are still struggling to obtain credit. Bonds also gained this week as yields on inflation- protected securities signaled investors expect consumer prices to keep falling over the next five years. “I recommend buying,” said Eiji Dohke , chief strategist in Tokyo at UBS Securities Japan Ltd., one of the 23 primary dealers required to bid at government debt sales. “Domestic investors are concerned about a double-dip recession and are skeptical about the continued rally in stocks.” The yield on the 1.5 percent bond due June 2019 fell 5.5 basis points this week to 1.375 percent, the lowest since July 30, in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The price rose 0.478 yen in the five- day period to 101.082 yen. Ten-year bond futures for September delivery advanced 0.36 this week to 137.98 at the Tokyo Stock Exchange. Not ‘Impressive’ Any recovery in the world’s second-largest economy is likely to be weak as there is no guarantee demand will increase once global stimulus programs are phased out, Bank of Japan Governor Masaaki Shirakawa said this week. “Even if we have a recovery, I don’t think its strength will be impressive,” he told reporters on Aug. 11 when the central bank kept the benchmark rate on hold at 0.1 percent. Since lowering the overnight rate in December, the central bank has been buying commercial paper and corporate bonds to keep borrowing costs capped. It has also offered unlimited loans to banks in exchange for eligible collateral. The Bank of Japan extended the steps for three months until Dec. 31 at the July meeting. The gain in bonds was tempered as stocks yesterday rose for a second day, damping demand for the relative safety of debt. The Nikkei 225 Stock Average rose 0.8 percent yesterday, capping a fifth-straight weekly advance. Ten-year yields had a correlation of 0.84 with the Nikkei 225 in the past week, compared with a relationship of 0.56 last month, according to Bloomberg data. A value of 1 would mean the two moved in lockstep. Deflation Outlook The difference between rates on five-year notes and inflation-linked debt, which reflects the outlook among traders for consumer prices over the term of the securities, was negative 1.6 percentage points yesterday. Consumer prices excluding fresh food declined 1.7 percent in June from a year earlier, the statistics bureau said on July 31. Inflation-adjusted securities typically yield less than regular bonds because their principal payment increases at the same rate as inflation. The central bank on Aug. 11 said it remains concerned about “downside risks to economic activity and prices” even as the country’s deepest postwar recession abates. Spending by companies and consumers remains sluggish and the outlook is “attended by a significant level of uncertainty,” the central bank said. “The recovery we are seeing is a result from the various economic measures and don’t signal the actual recovery,” said Shinji Hiramatsu , senior investment manager at Sompo Japan Asset Management Ltd. in Tokyo. To contact the reporter on this story: Theresa Barraclough in Tokyo at tbarraclough@bloomberg.net .

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Most Asian Stocks Decline as Commodities Producers Fall; Honda Advances

July 29, 2009

By Patrick Rial and Masaki Kondo July 30 (Bloomberg) — Most Asian stocks fell as lower commodities prices dragged down materials producers, overshadowing better-than-expected earnings at Honda Motor Co. and Nissan Motor Co

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Stocks Climb, Led by Pearson, Nomura; MSCI World Index Gains for 11th Day

July 27, 2009

By Adam Haigh July 27 (Bloomberg) — European and Asian shares advanced, pushing the MSCI World Index higher for an 11th consecutive day, on speculation corporate profits will improve as the global economic slump eases.

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