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Most Asian Stocks Decline Mining Companies Fall on China Demand Concern

by on June 3, 2010

By Akiko Ikeda and Satoshi Kawano (Corrects direction of U.S, European index moves in eighth paragraph.) June 4 (Bloomberg) — Japanese and Australian stock futures rose on speculation a U.S. jobs report today will bolster optimism in the economy and as oil prices gained. American depositary receipts of Toyota Motor Corp., a Japanese carmaker that gets 31 percent of revenue in North America, advanced 0.5 percent from the closing share price in Tokyo. Those of Woodside Petroleum Ltd., Australia’s second- largest oil and gas producer, gained 0.9 percent after crude oil rose to a three-week high yesterday in New York. ADRs of Sharp Corp., a maker of consumer electronics that counts Europe as its biggest overseas market place, fell 1.2 percent. “There are expectations U.S. employment will improve significantly, but it is partially priced in already,” said Juichi Wako , a senior strategist at Tokyo-based Nomura Holdings Inc. “We might see a tug-of-war between gains in resource- related stocks that have been relatively sluggish lately and drops in exporters that jumped yesterday.” Futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 9,925 in Chicago yesterday, the same as in Singapore and higher than the Nikkei’s closing spot price of 9,914.19. The futures were bid in the pre-market at 9,920 in Osaka, Japan, at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index slid 0.1 percent today. New Zealand’s NZX 50 Index gained 0.2 percent in Wellington. U.S. Payrolls Report Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The index rose 0.4 percent yesterday in New York. A monthly employment report by the Labor Department today may show that payrolls climbed by 536,000 in May, the fifth straight month of gains and the biggest increase since 1983, according to the median forecast in a Bloomberg survey. Goldman Sachs Group Inc. raised its estimate for payroll growth to 600,000 from 500,000, according to a report sent to clients yesterday. The Democratic Party of Japan is scheduled to vote on a new prime minister starting at 11 a.m. today in Tokyo to replace Yukio Hatoyama after his resignation on June 2. Finance Minister Naoto Kan and Shinji Tarutoko, a lower-house lawmaker, will run in the election. New cabinet members will also be announced. “There will be no surprise and the impact on the financial market will be limited if Kan is chosen as the new prime minister, as expected,” said Wako. The MSCI Asia Pacific Index has declined 5.6 percent in 2010, compared with declines of 1.1 percent by the S&P 500 and 2 percent by the Stoxx Europe 600 Index . Stocks in the Asian benchmark are valued at 14.6 times estimated earnings, compared with 13.6 times for the S&P and 11.5 times for the Stoxx. Crude oil for July delivery increased 2.4 percent, to $74.61 a barrel in New York, the highest settlement since May 12. The yen appreciated to 112.60 against the euro, compared with 113.72 at the close of stock trading in Tokyo yesterday. To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net ; Satoshi Kawano in Tokyo at skawano1@bloomberg.net .

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Most Asian Stocks Decline Mining Companies Fall on China Demand Concern

Asian Stocks Fall on Japanese Political Concern Toyota Motor, Sony Slump

by on May 31, 2010

By Masaki Kondo and Satoshi Kawano June 1 (Bloomberg) — Asian stocks fell, extending the MSCI Asia Pacific Index’s biggest monthly drop since October 2008, as speculation over the future of Japanese Prime Minister Yukio Hatoyama dragged the country’s equities lower. Toyota Motor Corp., Japan’s largest automaker, sank 1.4 percent. Sony Corp. , which gets 69 percent of its sales outside Japan, dropped 1.5 percent as a stronger yen threatened to hurt the value of overseas revenue. Tokyo Electric Power Co. led gains among utilities after Goldman Sachs Group Inc. upgraded the stock. The MSCI Asia Pacific Index declined 0.4 percent to 113.04 as of 10:20 a.m. in Tokyo, with more than two stocks gaining for each that fell. Japan’s Nikkei 225 Stock Average lost 0.8 percent before a meeting between Hatoyama and Ichiro Ozawa , secretary-general of the ruling party, to discuss the party’s future. “Political turmoil may make some investors refrain from buying stocks,” said Toshiyuki Kanayama , a market analyst at Tokyo-based Monex Inc. “There’s also risk in selling stocks, considering the earnings recovery and relatively low valuations.” Chinese equities may be active after a purchasing managers’ index showed the country’s manufacturing industry expanded at a slower pace in May. Australia’s S&P/ASX 200 Index dropped 0.8 percent. The Kospi Index slumped 0.4 percent in Seoul. Exporters in Japan declined as the yen strengthened to 111.59 per euro today from 112.59 at the 3 p.m. close of stock trading in Tokyo yesterday, while appreciating to 90.99 per dollar from 91.52. A stronger yen reduces the value of overseas sales at Japanese companies when repatriated. Japanese stocks fell after Hatoyama pledged appropriate action in the face of plunging approval ratings. Three polls released on May 30 showed Prime Minister Hatoyama’s rating at or below 20 percent and six in 10 voters think he should quit. Yahoo Japan Corp. and Murata Manufacturing Co. gained after brokerages raised their investment ratings. To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Satoshi Kawano in Tokyo at skawano1@bloomberg.net .

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Asian Stocks Fall on Japanese Political Concern Toyota Motor, Sony Slump

Japanese Stocks Decline on Greece Debt Concern, Stronger Yen; Nissan Falls

April 21, 2010

By Norie Kuboyama and Satoshi Kawano April 22 (Bloomberg) — Japanese stocks declined amid concern Greece will default on its debt, and as the yen strengthened. Nissan Motor Co., a carmaker that gets 77 percent of its revenue outside Japan, fell 1.4 percent. Sumitomo Mitsui Financial Group Inc., Japan’s second-largest lender by market value, dropped 0.8 percent after the stock jumped the most in two weeks yesterday. Sony Corp., an electronics maker that gets 71 percent of its sales outside Japan, declined 1.2 percent. “The prolonged concern about Greece’s debt is a headwind,” said Mitsushige Akino , who oversees the equivalent of $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “Yesterday’s gain was surprisingly big, so investors will likely sell stocks to lock in profits.” The Nikkei 225 Stock Average fell 1.1 percent to 10,964.68 as of 9:03 a.m. The broader Topix index slid 0.9 percent to 978.65, with almost three times as many shares declining as advancing. The Topix has risen 7.8 percent this year, compared with increases of 8.1 percent for the S&P 500 and 5.6 percent for the Dow Jones Stoxx Europe 600 Index. Companies in the Japanese gauge trade at 19.8 times estimated earnings on average, compared with 15.2 times for the S&P 500 and 13.1 times for the Stoxx 600. To contact the reporter for this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net ; Satoshi Kawano in Tokyo skawano1@bloomberg.net .

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Japanese, Australian Stock Futures Climb on U.S. Earnings, Oil Price, Yen

April 20, 2010

By Norie Kuboyama and Satoshi Kawano April 21 (Bloomberg) — Japanese and Australian stock futures rose after U.S. companies reported better-than-expected earnings, commodity prices gained and the yen weakened. American depositary receipts of Canon Inc., a Japanese camera maker that gets about 28 percent of its revenue in the Americas, closed 1 percent higher than the Tokyo close yesterday. Those of Honda Motor Co., a Japanese carmaker that gets about 85 percent of its sales abroad, rose 0.9 percent. ADRs of Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, advanced 0.6 percent after the price of crude gained.      “The series of good results from U.S. companies is raising expectations for corporate earnings here,” said Hiroichi Nishi , an equities manager in Tokyo at Nikko Cordial Securities Inc. “The world economy is steadily recovering.” Yen-denominated futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 11,005 in Chicago yesterday, 1 percent more than 10,900 in Singapore. They were bid in the pre-market at 11,030 as of 8:04 a.m. today in Osaka, Japan. The Nikkei 225 closed at 10,900.68 yesterday. Futures on Australia’s S&P/ASX 200 Index rose 0.9 percent today. New Zealand’s NZX 50 Index advanced 0.3 percent. Futures on the Standard & Poor’s 500 Index rose 0.1 percent today, and the index climbed 0.8 percent yesterday in New York. Harley-Davidson Inc. , the biggest U.S. motorcycle maker, had income from continuing operations of $68.7 million, more than analysts expected, according to estimates compiled by Bloomberg. After U.S. trading closed, Apple Inc. reported profit and sales that soared past analysts’ estimates. Valuations, Currency The MSCI Asia Pacific Index has risen 4.6 percent this year, compared with increases of 8.3 percent for the S&P 500 and 6.3 percent for the Dow Jones Stoxx Europe 600 Index. Companies in the Asian gauge trade at 16.1 times estimated earnings on average, compared with 15.4 times for the S&P 500 and 13.2 times for the Stoxx 600. The yen weakened to as low as 93.39 against the dollar today from 92.60 at the 3 p.m. close of stock trading in Tokyo yesterday, boosting the value of overseas income at Japanese companies when converted into their home currency. The yen depreciated to as low as 125.37 against the euro from 124.63. Crude oil rose 2.5 percent yesterday in New York, the biggest increase since March 29. The London Metal Exchange Index of six industrial metals, including copper and zinc, climbed 1.5 percent in its first advance in three days. In Asia, LG Chem Ltd. , South Korea’s biggest maker of chemicals, said first-quarter profit rose 73 percent to 517.7 billion won ($464 million) after the global economic recovery boosted prices of materials used in plastics and synthetic fabrics. To contact the reporter for this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net ; Satoshi Kawano in Tokyo skawano1@bloomberg.net .

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Asian Stocks Rise on Divided Vote on Goldman Sachs, Citigroup Profit, Yen

April 19, 2010

By Kana Nishizawa and Satoshi Kawano April 20 (Bloomberg) — Asian stocks rose, led by finance companies, as people familiar with the matter said regulators were split on suing Goldman Sachs Group Inc., easing concern over the impact increased scrutiny on banks will have on profits. Sumitomo Mitsui Financial Group Inc. rose 1.4 percent in Tokyo as Morgan Stanley upgraded the nation’s banks and Citigroup Inc.’s profit beat estimates. National Australia Bank Ltd., the nation’s third-biggest lender, climbed 2.8 percent in Sydney. Honda Motor Co., which gets 44 percent of its sales in North America, gained 1.7 percent in Tokyo after the yen weakened against the dollar. The MSCI Asia Pacific Index gained 0.6 percent to 126.30 as of 9:44 a.m. in Tokyo. The gauge slumped the most since Feb. 19 yesterday after regulators sued Goldman Sachs for fraud related to collateralized debt obligations. Securities and Exchange Commission officials voted 3-2 to pursue the case, two people familiar with the matter said. “The divided vote on Goldman suggests excessive regulation that would reduce bank earnings will be avoided,” said Fumiyuki Nakanishi , a senior strategist at SMBC Friend Securities Co. in Tokyo. Futures on the Standard & Poor’s 500 Index advanced 0.1 percent. The gauge rose 0.5 percent yesterday as the index of U.S. leading indicators rose in March by the most in 10 months. To contact the reporters for this story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net ; Satoshi Kawano in Tokyo skawano1@bloomberg.net .

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Asian Stocks Fluctuate After Australia Confidence Report; Shippers Decline

March 9, 2010

By Shani Raja and Satoshi Kawano March 10 (Bloomberg) — Asian stocks fluctuated as Australian consumer confidence rose, while shipping lines declined after a measure of cargo transport rates fell for the first time in almost two weeks. Virgin Blue Holdings Ltd. , Australia’s second-biggest airline, climbed 4 percent. David Jones Ltd. , the nation’s No. 2 department store chain, advanced 1.2 percent. STX Pan Ocean Co., South Korea’s largest bulk-shipping line, dropped 1.9 percent in Seoul, and Kawasaki Kisen Kaisha Ltd., Japan’s third-largest line, fell 1.7 percent in Tokyo. “We don’t have a strong catalyst, so I’m expecting stocks to drift without a clear direction today,” said Hiroichi Nishi , an equities manager at Nikko Cordial Securities Inc. in Tokyo. The MSCI Asia Pacific Index was little changed at 122.79 as of 9:30 a.m. in Tokyo, with about as many stocks advancing as declining. The index has risen 74 percent since March 9 last year, when it sank to its lowest level since the September 2008 bankruptcy filing of Lehman Brothers Holdings Inc. Australia’s S&P/ASX 200 Index and Japan’s Nikkei 225 Stock Average were also little changed. To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net ; Satoshi Kawano in Tokyo skawano1@bloomberg.net .

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Toyota Shares Lure Fortis, Huntington Asset, Ichiyoshi After Recall Slump

February 11, 2010

By Jonathan Burgos and Satoshi Kawano Feb. 11 (Bloomberg) — Toyota Motor Corp. ’s biggest vehicle recall has erased $30 billion from its stock, luring Fortis Investments, Huntington Asset Advisors and Ichiyoshi Investment Management Co. Gentoku Kiyokawa , who works for Fortis in Tokyo, bought Toyota shares on Feb. 4 when the stock traded for 1.03 times the company’s net worth, the cheapest valuation since April, according to data compiled by Bloomberg. Peter Sorrentino , a fund manager at Cincinnati-based Huntington, said he may buy shares of the world’s largest automaker. Toyota has slumped 19 percent since it began a recall of millions of vehicles to repair problems linked to unintended acceleration on Jan. 21. The growing crisis prompted Toyota President Akio Toyoda to apologize on Feb. 5. The company on Feb. 4 predicted a return to profit in the fiscal year ending March 31, even as it said recalls may cost 100 billion yen ($1.1 billion). The company raised its forecast for global vehicle sales in the fiscal year ending March 31 to 7.18 million compared with an earlier prediction of 7.03 million. “Toyota is clearly more attractive now although the worst is probably not over for the company,” said Sorrentino , whose firm holds $12.8 billion including Toyota shares. “We’re not averse to adding to our position. We like their long-term prospects. We think a Toyota stock bought this year is going to pay us in years to come.” Top-Selling Vehicle The company announced Feb. 9 it will recall another 437,000 hybrid vehicles including the Prius, the top-selling vehicle in Japan, due to brake-system defects. On the same day, U.S. safety officials said they were reviewing Toyota’s Corolla, the world’s best-selling car, after complaints about how it steered. Toyota is already making adjustments and improvements for the Prius braking system, Japan’s Economy Minister Masayuki Naoshima said Feb. 3 after meeting with Toyota Executive Vice President Shinichi Sasaki , according to comments broadcast on broadcaster NHK. Toyota, based in Toyota City, Japan, has begun sending metal plates to dealerships to repair the pedal defect on the recalled autos. The company’s full-year net income forecast of 80 billion yen excludes the impact of recalls linked to brake problems for hybrid cars including Prius. Lawsuits faced by the Japanese carmaker could push the cost of recalls above $2 billion, according to estimates by lawyers of customers suing Toyota. The company’s current corporate net worth, or the value of assets minus liabilities, of 1.07 times compares with the average of 1.74 since 1998, according to Bloomberg data. Toyota’s present book value is also less than half the average of 2.35 times for 50 global automakers tracked by Bloomberg. Honda, Hyundai The company could lose market share to competitors like Ford Motor Co. and Hyundai Motor Co. , Vivek Vaidya , automotive and transportation director at market researcher Frost & Sullivan, told Bloomberg Television yesterday. Seoul-based Hyundai shares have gained 7.3 percent since Toyota announced it is widening recalls on Jan. 21, while shares of Honda Motor Co. slumped 9.1 percent. The Tokyo-based company, Toyota’s biggest rival in Japan, said on Feb. 9 it will recall 437,763 vehicles to fix faulty air bags. Ford, based in Dearborn, Michigan, has lost 2.2 percent. Toyota’s “stock might be looking attractive, but only tactically,” said Diane Lin , a Sydney-based fund manager who follows Japanese equities for Pengana Capital Ltd., which oversees $1 billion. She doesn’t hold Toyota shares. “Fundamentally, I don’t think it’s time to buy. There are too many uncertainties.” Customer Trust Toyota recalled 1.36 million cars in markets including Japan and the U.S. in January 2009 to fix defects such as faulty seat belts and exhaust system. Toyoda, who took over as Toyota president in June, said on Feb. 5 this year the company aims to regain customer trust and that the company should “admit mistakes where they were made.” “Sales will probably slump for a few months, but that doesn’t mean Toyota-made cars totally disappear from the earth,” said Mitsushige Akino , who oversees the equivalent of $450 million at Tokyo-based Ichiyoshi Investment and has been adding to his holdings. “This is just one of the many recalls we often see from manufacturers.” Fortis’s Kiyokawa bought Toyota shares at 3,200 yen on Feb. 4, lower than the stock’s book value per share of 3,208 yen that day, he said. The stock closed yesterday at 3,390 yen. Japan’s stock market is closed today for a holiday. “Toyota doesn’t deserve to be treated like a bankrupt business,” said Kiyokawa, whose firm oversees the equivalent of about $234 billion globally. “The stock price below book value is clearly overdone.” To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net ; Satoshi Kawano in Tokyo skawano1@bloomberg.net .

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Japan Stock Futures, Australia Shares Advance on U.S. Factory Orders, Oil

January 5, 2010

By Kana Nishizawa and Satoshi Kawano Jan. 6 (Bloomberg) — Japanese stock futures and Australian shares rose after U.S. factory orders increased more than estimated, and after crude oil gained. U.S.-traded receipts of Toyota Motor Corp. , the world’s biggest carmaker and which gets 31 percent of its revenue in North America, advanced 1 percent from the closing share price in Tokyo yesterday. Those of Hitachi Ltd. , a maker of industrial equipment which receives more than 40 percent of its revenue overseas, rose 1 percent. The company’s shares were also upgraded to market perform by Mitsubishi UFJ Financial Group. BHP Billiton Ltd. , Australia’s top oil producer and the world’s largest mining company, added 0.6 percent in Sydney today. “The better-than-expected factory orders in the U.S. shows that the global economy is in a steady recovery,” said Hiroichi Nishi , an equities manager at Nikko Cordial Securities Inc. in Tokyo. Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,755 in Chicago yesterday, compared with 10,705 in Singapore. They were bid at 10,700 in the pre-market in Osaka, Japan, at 8:05 a.m. local time today. Australia’s S&P/ASX 200 Index climbed 0.1 percent to 4,929.20 as of 9:05 a.m. in Sydney. New Zealand’s NZX 50 Index was little changed at 3,267.63 in Wellington. The Standard & Poor’s 500 Index added 0.3 percent in New York yesterday. Factory orders rose 1.1 percent in November, more than twice as much as projected, according to figures from the Commerce Department. The manufacturing report showed companies boosted spending on new equipment toward the end of 2009, signaling growing confidence in the economic recovery. Crude Oil Gains Crude oil for February delivery rose 0.3 percent to the highest close in more than 14 months on speculation that cold weather in the northern U.S. bolstered fuel demand and reduced stockpiles. Gold futures also advanced on speculation that the U.S. dollar will extend a slump, boosting the precious metal’s allure as an alternative investment. The MSCI Asia Pacific Index climbed 34 percent last year, outpacing gains of 23 percent by the S&P 500 and 28 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the gauge are valued at an average of 20 times estimated earnings, compared with 15 times for the S&P and 13 for the Stoxx. To contact the reporters for this story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net ; Satoshi Kawano in Tokyo at skawano1@bloomberg.net .

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Sell Japan Stocks, Buy Bonds as Loan Costs Climb: Chart of the Day

November 20, 2009

By Masaki Kondo and Satoshi Kawano Nov. 20 (Bloomberg) — Investors should sell Japanese stocks and buy government bonds as deepening deflation caused real interest rates to diverge from stock prices for the first time in 18 years, according to MU Investments Co. The CHART OF THE DAY shows real interest rates, derived by subtracting inflation rates from yields on 10-year government bonds, have risen since the beginning of this year, while the Topix index, a benchmark equities gauge, lagged behind. Consumer prices, excluding fresh food and energy, slid 1 percent in September, the steepest fall since May 2001. “Under Japan’s deflationary environment, investors will probably be better off by selling stocks and buying government bonds with short maturity for income gains,” said Hiroshi Morikawa , a senior strategist at Tokyo-based MU Investments. October’s consumer price data is due Nov. 27, leaving real interest-rate data through September, the trend will be little changed in upcoming reports, he said. Returns on 10-year government notes climbed to 1.475 percent on Nov. 9, a level not seen in five months on concern debt sales will rise, data compiled by Bloomberg showed. Last month, state agencies proposed in initial budgets to spend a record 95.04 trillion yen ($1.07 trillion) in the fiscal year from April 1, even as Japan posted a shortfall in corporate taxes for the first time on record in a first-half period. “Interest rates are rising not because of expectations for an economic recovery but because of concern the budget deficit will worsen,” said MU’s Morikawa. Japan’s debt burden is approaching 200 percent of gross domestic product, the Organization for Economic Cooperation and Development estimates, as the government pledged cash to child- raising families and lower school tuition. Falling wages and a worsening job outlook are discouraging consumers from spending, prompting companies to cut prices. (To save a copy of this chart, click here.) 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 Stock Futures, Australia’s Index Climb as Fed Pledges Low Rates

November 4, 2009

By Kana Nishizawa and Satoshi Kawano Nov. 5 (Bloomberg) — Japanese stock futures and Australian shares gained after the U.S. Federal Reserve said it will keep interest rates near zero for “an extended period” to aid the economic recovery. U.S.-traded receipts of Sharp Corp. , Japan’s biggest maker of liquid-crystal displays and which derives more than half of its revenue from overseas, added 0.7 percent from the closing share price in Tokyo yesterday. Those of Nissan Motor Co. , Japan’s third-biggest automaker, gained 2.6 percent after the company narrowed its full-year net loss forecast. Newcrest Mining Ltd., Australia’s largest gold producer, rose 1.1 percent in Sydney today after prices for the metal climbed to a record. Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 9,860 in Chicago yesterday, up from 9,835 in Singapore. They were bid at 9,870 in the pre-market in Osaka, Japan, at 8:07 a.m. local time. Australia’s S&P/ASX 200 Index gained 0.3 percent today in Sydney. New Zealand’s NZX 50 Index added 0.1 percent in Wellington. “With the excess liquidity from the low interest rates in the U.S., we can expect some risk money to flow into export and commodity-related stocks,” said Mitsushige Akino , who manages the equivalent of $666 million at Tokyo-based Ichiyoshi Investment Management Co. in Japan. In New York, the Standard & Poor’s 500 Index rose 0.1 percent yesterday. The Federal Reserve repeated it will keep interest rates near zero for “an extended period” and specified for the first time that policy will stay unchanged as long as inflation expectations are stable and unemployment fails to decline. To contact the reporter for this story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net ; Satoshi Kawano in Tokyo skawano1@bloomberg.net .

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Japan, Australia Futures Fall on Nomura’s Share Sale, U.S. Housing Decline

September 24, 2009

By Masaki Kondo and Satoshi Kawano Sept. 25 (Bloomberg) — Japan’s and Australia’s stock futures dropped after Nomura Holdings Inc. said it will sell new shares, sales of existing homes unexpectedly declined in the U.S. and commodity prices fell. U.S.-traded securities of Nomura , Japan’s largest brokerage, tumbled 13 percent from the Tokyo close. Mitsubishi UFJ Financial Group Inc., the nation’s biggest publicly traded bank, slid 4.8 percent. Honda Motor Co., which gets 47 percent of its sales in North America, lost 1.6 percent. Securities of BHP Billiton Ltd., the world’s biggest mining company, sank 1.8 percent from the Sydney close. “Investors are increasingly wary major financial companies will enter another round of equity sales,” said Tsutomu Yamada , at Tokyo-based kabu.com Securities Co. in Tokyo. “With non- performing loans increasing, Japan’s financial sector is like a hanged man whose legs are being pulled.” Futures on Japan’s Nikkei 225 Stock Average expiring in December closed at 10,340 in Chicago yesterday, 1.1 percent lower than Osaka. Australia’s S&P/ASX 200 Index futures contract due in December fell 1.1 percent today. New Zealand’s NZX 50 Index lost 0.4 percent in Wellington. The MSCI Asia Pacific Index has gained 68 percent from a five-year low on March 9 on speculation improved global growth will boost corporate earnings. The advance has driven the average price of the gauge’s members to 23.8 times estimated net income for this year, higher than 17.5 times for the Standard & Poor’s 500 Index in the U.S. Nomura’s Share Sale Nomura plans to sell a record 511.3 billion yen ($5.6 billion) of stock to fund expansion in the U.S. The Tokyo-based brokerage will sell about 800 million shares, equivalent to almost 30 percent of the stock outstanding, according to documents filed to the Ministry of Finance. Nikko Citigroup Ltd. downgraded Nomura to “sell” from “hold.” Group of 20 nations met yesterday and today in Pittsburgh to discuss measures to stabilize the global economic recovery. The G-20 is moving forward with efforts to require banks to hold more capital in reserve against potential losses and rein in bankers’ pay. In New York, the S&P 500 slid 1 percent after a report from the National Association of Realtors showed sales of existing U.S. homes dropped 2.7 percent last month, while economists had estimated purchases would increase. The unexpected decline in home sales rekindled concern the global economic recovery will slow, causing commodity prices to fall. Crude oil dropped 4.5 percent to $65.89 a barrel, the lowest settlement since July 29, while copper slid 3.5 percent. In Japan, yesterday was the last day investors could get rights to dividends for some shares that will be paid on Oct. 1, according to Joinvest Securities Co., a subsidiary of Nomura. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Satoshi Kawano in Tokyo at skawano1@bloomberg.net .

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Japan Stocks Fall on Credit Market Concern, Weaker Dollar; Seven & I Drops

September 1, 2009

By Masaki Kondo and Satoshi Kawano Sept. 2 (Bloomberg) — Japanese stocks retreated after U.S. financial shares slumped the most in more than two months, the dollar weakened versus yen and metal prices declined. Mizuho Financial Group Inc. , Japan’s second-biggest publicly traded bank, slumped 1.8 percent. Mazda Motor Corp. , a carmaker that exports 80 percent of its domestic production, lost 2.3 percent even after U.S. manufacturing and pending homes sales increased more than estimated. Seven & I Holdings Co., Japan’s largest retailer, was poised to dive after cutting its annual earnings forecast. The drops in U.S. equities and commodities “will prompt investors to sell related stocks,” said Hiroichi Nishi , an equities manager at Tokyo-based Nikko Cordial Securities Inc. “As the global economy recovers, there are many investors who want to buy on dips.” The Nikkei 225 Stock Average dropped 1.6 percent to 10,364.49 as of 9:02 a.m. in Tokyo. The broader Topix index fell 1.5 percent to 954.73, with all of its 33 industry groups declining. In New York, the S&P 500 Index slid 2.2 percent yesterday, the most since Aug. 17. The KBW Bank Index of 24 U.S. financial companies fell 5.8 percent, its steepest drop since June 22. U.S. industry reports pointed to an end of the U.S. recession. Manufacturing in August and contracts to buy previously owned homes in July increased more than economists had estimated, according to separate reports from the Institute for Supply Management and the National Association of Realtors. Both gauges rose to a level not seen since June 2007. Crude oil fell 2.7 percent to $68.05 a barrel in New York yesterday, the lowest settlement since Aug. 17. A gauge of six metals in London dropped 3.6 percent, the most since July 8. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Satoshi Kawano in Tokyo at skawano1@bloomberg.net .

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Asian Stocks Gain on Higher Metal Prices; Mitsubishi, BHP, Leighton Climb

August 13, 2009

By Jonathan Burgos and Satoshi Kawano

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Japanese, Australian Stock Futures Gain on Metals Prices; Honda Declines

August 13, 2009

By Masaki Kondo and Satoshi Kawano Aug. 14 (Bloomberg) — Japanese and Australian stock futures rose after metals prices climbed to a 10-month high, outweighing a weakening dollar that dimmed the U.S. earnings prospects for Japanese manufacturers. U.S.-traded securities of Mitsubishi Corp. , a Japanese trading company that gets more than a third of its sales from commodities, added 0.9 percent from the Tokyo close. Those of BHP Billiton Ltd., the world’s biggest mining company, advanced 1 percent. Honda Motor Co. , which gets more than half its sales in North America, sank 0.5 percent. “Resilience in the commodity market will likely prompt investors to snap up Japanese trading houses, while the weaker dollar will drive down exporters,” said Juichi Wako , a senior strategist at Tokyo-based Nomura Holdings Inc. Futures on Japan’s Nikkei 225 Stock Average expiring in September closed at 10,545 in Chicago, 0.2 percent higher than 10,520 in Osaka. Australia’s S&P/ASX 200 Index futures contract due in September rose 0.9 percent. New Zealand’s NZX 50 Index was little changed at 3,125.79 in Wellington. The MSCI Asia Pacific Index has gained 61 percent from a more than five-year low on March 9, as improved economic statistics and corporate earnings fanned optimism the global economy is recovering. Stocks on the gauge traded at 1.56 times their corporate net worth yesterday, nearing an 11-month high of 1.57 times on Aug. 11, according to data compiled by Bloomberg. In New York, the Standard & Poor’s 500 Index climbed 0.7 percent, with the KBW Bank Index advancing 3.1 percent, the most this week. The S&P 500 earlier dropped as much as 0.5 percent following government reports on retail sales and initial jobless claims that were worse than economists had estimated. Europe’s Economy The European Union said yesterday the euro-region’s economy contracted 0.1 percent in the three months to June from the first quarter. Economists had estimated a 0.5 percent decline. A gauge of six metals in London climbed 3.6 percent yesterday to the highest level since Sept. 30. Copper rose 3.2 percent in New York. The Baltic Dry Index , a measure of shipping rates for commodities, advanced for the first time in 11 sessions with a 2.8 percent gain. The dollar weakened versus the yen to as much as 95.26 from 96.11 at the 3 p.m. close of Toyo stock trading yesterday, reducing the value of overseas sales at Japanese companies when converted into their home currency. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Satoshi Kawano in Tokyo at skawano1@bloomberg.net .

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Japanese Stocks Gain on Machinery Orders, U.S. Jobs; Bridgestone Advances

August 9, 2009

By Masaki Kondo and Satoshi Kawano Aug. 10 (Bloomberg) — Japanese stocks rose after the U.S. jobless rate dropped for the first time in more than a year, orders for Japanese machinery increased and the yen weakened. Mitsubishi Motors Corp. added 1.2 percent. Hitachi Construction Machinery Co. advanced 1.7 percent. Sumitomo Metal Mining Co. gained 1.6 percent after metals prices increased for a fourth straight week. Bridgestone Corp., the world’s largest tiremaker, was set to climb after boosting its full-year outlook. The Nikkei 225 Stock Average rose 114.97, or 1.1 percent, to 10,527.06 as of 9:04 a.m. in Tokyo. The broader Topix index climbed 10.28, or 1.1 percent, to 967.04. “The improvement in the U.S. job market will increase demand for risk assets globally, including stocks,” said Tomochika Kitaoka , a senior strategist at Mizuho Securities Co. in Tokyo. “Exporters will get an extra boost in that the yen is sufficiently weak to help raise their profits.” In New York, the Standard & Poor’s 500 Index climbed 1.3 percent on Aug. 7 after a Labor Department report showed the joblessness rate dropped to 9.4 percent last month from June, the first decline since April 2008. Economists had estimated the rate would rise to 9.6 percent. Japan’s machine orders jumped 9.7 percent in June from May, the Cabinet Office said before markets opened today. Bookings, an indicator of corporate spending in the next three to six months, were estimated to have risen 2.6 percent, according to economists surveyed by Bloomberg. The Nikkei gained 18 percent in 2009 through Aug. 7 as manufacturing in China, Europe and the U.S. improved. Stocks on the gauge traded at 1.34 times corporate net worth last week, climbing back to their level on Sept. 29, according to data from Nikkei Inc., which compiles the gauge. The Japanese currency depreciated to as much as 97.78 from about 95.43 at the 3 p.m. close of Tokyo stock trading on Aug. 7. A weaker yen boosts the value of overseas trading at Japanese companies when converted into the local currency. A gauge of six metals in London added 1.7 percent, bringing its five-day advance to 7.2 percent and capping its fourth weekly gain. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Satoshi Kawano in Tokyo at skawano1@bloomberg.net .

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