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Yen Falls Versus Euro on Signs Global Economic Recovery Gaining Traction

by on June 13, 2010

By Ron Harui June 14 (Bloomberg) — The yen fell for a third day against the euro on signs the global economic recovery is gaining momentum, spurring demand for riskier investments. Japan’s currency weakened versus all 16 of its major counterparts after the Nikkei 225 Stock Average advanced as appetite increased for higher-yielding assets. The euro rose to its highest level in a week against the dollar before a European report that economists said will show industrial production expanded for an 11th month. “The outlook for economies worldwide to rebound is still intact,” said Tsutomu Soma , a bond and currency dealer at Okasan Securities Co. in Tokyo. “The bias is for the yen to be sold and the euro may also be bought.” The yen declined to 111.84 per euro as of 9:02 a.m. in Tokyo from 111.00 in New York on June 11. Japan’s currency traded at 91.69 per dollar from 91.65. The euro climbed to $1.2194 from $1.2112, after earlier reaching $1.2208, the strongest since June 4. The Nikkei 225 gained 1.3 percent after the MSCI World Index advanced 1.9 percent last week. European Industrial Output Europe’s currency strengthened versus all 16 of its most- traded counterparts. Industrial output in the 16-nation region grew 0.5 percent in April from March, when it increased a revised 1.6 percent, according to a Bloomberg News survey of economists before the European Union’s statistics office releases the report in Luxembourg today. European Central Bank Governing Council member Ewald Nowotny said the ECB will buy government bonds until the financial market calms down, the Nikkei newspaper reported yesterday, citing Nowotny. The euro’s current level still is within a normal range, Nikkei cited him as saying. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain — so-called net shorts — was 111,945 on June 8, data from the Washington-based Commodity Futures Trading Commission showed. Net shorts were 93,325 a week earlier. Futures positions, when they reach an extreme, are sometimes viewed as a contrarian indicator because traders often seek to cut positions when momentum in a currency shifts. To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net .

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Most Asian Stocks Advance on Japan Economic Growth, Commodities UFJ Gains

by on June 9, 2010

By Anna Kitanaka June 10 (Bloomberg) — Most Asian stocks rose after Japan’s economy grew faster than initially reported in the first quarter and commodity prices advanced. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, gained 1 percent in Tokyo. Toyota Motor Corp. , the world’s largest automaker, climbed 0.3 percent. Mitsubishi Corp. , which gets about 40 percent of sales from commodities, increased 1.2 percent. BHP Billiton Ltd. , the world’s biggest mining company, climbed 0.2 percent in Sydney. The MSCI Asia Pacific Index was little changed at 109.90 as of 9:20 a.m. in Tokyo, with about twice as many stocks advancing as declining. The gauge has retreated 15 percent from this year’s high on April 15 on concern debt crises among European countries will undermine a global economic recovery. The drop cut the price of shares in the index to 14.1 times estimated earnings on average yesterday, near the lowest level since January 2009. Japan’s Nikkei 225 Stock Average gained 0.4 percent after a Cabinet Office report showed the nation’s economy grew at a 5 percent annual rate in the first quarter, compared with the 4.9 percent reported last month. That exceeded the median estimate of economists surveyed by Bloomberg. Australia’s S&P/ASX 200 Index increased 0.5 percent. New Zealand’s NZX 50 Index gained 0.2 percent even after the nation’s central bank raised its benchmark interest rate for the first time in three years on concern inflation will accelerate. Futures on the Standard & Poor’s 500 Index were little changed. The index declined 0.6 percent yesterday as the cost to protect against default by BP Plc rose to a record on concern over the fallout from the Gulf of Mexico oil spill. To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net .

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Asia Stocks Rise for a Third Day After U.S. Shares Rally; Euro Declines

May 27, 2010

By Nicolas Johnson and Masaki Kondo May 28 (Bloomberg) — Asian stocks rose for a third day, extending a rally that drove the U.S. benchmark equity index to its biggest gain in almost three weeks. The euro weakened on concern Europe’s fiscal crisis will lead to stricter regulations. The MSCI Asia Pacific Index climbed 1.8 percent as of 11:13 a.m. in Tokyo, heading for its longest streak of gains since April 7. Futures on the U.S. Standard & Poor’s 500 Index were little changed after the gauge’s 3.3 percent surge yesterday. The euro weakened against all 16 of its most-traded counterparts. This week’s advances in stocks and crude oil pared a rout in May that’s the deepest since October 2008, the month after Lehman Brothers Holdings Inc. collapsed. Equities, oil and metals climbed yesterday after China affirmed its commitment to investing in Europe, easing concern that the region’s fiscal crisis will stall a global economic recovery. “The market has priced in all the bad news for now,” said Tokyo-based strategist Ayako Sera at Sumitomo Trust & Banking Co., which manages $307 billion. “Stocks are undervalued, assuming Europe’s problems won’t spill over and cripple the global economy. Japan’s Nikkei 225 Stock Average gained 1.7 percent today, the steepest increase among equity benchmarks in the Asia- Pacific region. Canon Inc., a camera maker that counts Europe as its biggest market, climbed 2.7 percent. Mitsubishi Corp., Japan’s biggest commodities trader, rose 1.4 percent after yesterday’s gains in oil and metals. BHP Billiton Ltd. and Rio Tinto Group, the world’s No. 1 and No. 3 companies, climbed more than 0.9 percent in Sydney. Markets in Indonesia, Malaysia, Singapore and Thailand are closed today for a holiday. U.S. markets will be shut on May 31. To contact the reporters on this story: Nicolas Johnson in Tokyo at nicojohnson@bloomberg.net .

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Japanese Stocks Decline on Europe Debt Concerns, Weaker Euro; Canon Falls

May 24, 2010

By Norie Kuboyama May 25 (Bloomberg) — Japanese stocks fell to their lowest since December on signs European financial institutions are facing stress and rising borrowing costs stoked concern Europe’s debt crisis will stall the global economic recovery. Mizuho Financial Group Inc. , Japan’s third-largest bank by market value, dropped 2.1 percent. Nikon Corp., which gets 24 percent of its revenue from Europe, declined 3.2 percent. Canon Inc., a camera maker that counts Europe as its biggest market, lost 1.8 percent after the yen strengthened against the euro. “Europe is walking on land mines that have yet to explode,” said Fumiyuki Nakanishi , a strategist at Tokyo-based SMBC Friend Securities Co. “Investors are selling shares and adjusting their positions on concerns over European debt.” The Nikkei 225 Stock Average dropped 1.3 percent to 9,634.71 as of 9:07 a.m. in Tokyo. The Topix slid 1 percent to 871.64. Companies in the Topix trade at 17 times estimated earnings on average, compared with 13.2 times for the Standard & Poor’s 500 Index and 11.1 times for the Stoxx Europe 600 Index. To contact the reporters for this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net ;

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Japanese Stocks Decline After Germany Restricts Short Selling; Honda Falls

May 18, 2010

By Masaki Kondo and Kotaro Tsunetomi May 19 (Bloomberg) — Japanese stocks fell after Germany’s move to halt a slump in European asset prices triggered a drop in the euro and crude oil. Honda Motor Co. , a Japanese carmaker that gets 81 percent of its sales abroad, retreated 1.5 percent after Germany’s financial regulator restricted naked short sales. Mitsubishi Corp. , a Japanese trading company that gets 41 percent of its sales from commodities, declined 1.4 percent. Mizuho Financial Group Inc. sank 1.8 percent after its U.S. counterparts led declines in the New York stock market. “Investors are afraid that Germany’s ban on naked trading will reduce people’s appetite for risk,” said Hiroichi Nishi , an equities manager in Tokyo at Nikko Cordial Securities Inc. “The weakening euro is worrying investors about Japanese exporters’ earnings.” The Nikkei 225 Stock Average declined 1.6 percent to 10,077.82 as of 9:01 a.m. in Tokyo. The broader Topix index fell 1.4 percent to 901.38, with all but one of its 33 industry groups slumping. The Nikkei 225 has lost 11 percent from a 52-week high on April 5 on concern a crisis of government debt from Greece to Spain will spill over to other European nations. A decline of 10 percent is the level some analysts refer to as a correction. The average price of stocks in the gauge is 18.8 times estimated earnings , near the lowest level since at least April 1. U.S. Futures Decline Futures on the Standard & Poor’s 500 Index slid 0.7 percent. The gauge declined 1.4 percent in New York yesterday after Germany’s BaFin financial-services regulator said it would introduce a temporary ban on naked short selling and naked credit-default swaps of euro-area government bonds starting at midnight. The ban will also apply to naked short selling in shares of 10 banks and insurers including Allianz SE and Deutsche Bank AG. Short selling involves the sale of borrowed securities in the hope of profiting by buying the securities later at a lower price and returning them to the owner. When securities are sold naked, the trader fails to borrow the assets before sending an order to sell. Investors own naked credit-default swaps when they don’t hold the bonds to which the derivatives are linked. The euro depreciated to 111.54 per yen today from 114.44 at the 3 p.m. close of stock trading in Tokyo yesterday. The dollar weakened versus the yen to 91.84 from 92.56. A stronger yen reduces the value of overseas sales at Japanese companies when converted into their home currency. Crude oil for June delivery extended its drop to a sixth session yesterday in New York and slid 1 percent to its lowest settlement since Sept. 29. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Kotaro Tsunetomi in Tokyo at ktsunetomi@bloomberg.net .

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Japanese Stock Futures Climb on Weakening Yen; Australian Futures Advance

May 17, 2010

By Masaki Kondo May 18 (Bloomberg) — Japanese and Australian stock futures rose after the euro rebounded from a four-year low, easing concern the shared European currency will collapse in the face of the region’s debt crisis. American depositary receipts of Sony Corp. , an electronics maker that gets 69 percent of its sales outside Japan, closed 0.8 percent higher than the Tokyo close. Those of Mitsubishi Corp. , a Japanese trading company that gets 40 percent of its sales from commodities, lost 0.4 percent after prices for metals and oil dropped. ADRs of Westpac Banking Corp. gained 4.4 percent after the stock tumbled 6.5 percent in Sydney yesterday. Yen-denominated futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 10,290 in Chicago yesterday, 0.3 percent higher than 10,255 in Singapore. They were bid in the pre-market at 10,340 as of 8:05 a.m. in Osaka. The Nikkei 225 plunged 2.2 percent to 10,235.76 yesterday, a level not seen since March 4. “The recent selloffs were excessive,” said Fumiyuki Nakanishi , a senior strategist at Tokyo-based SMBC Friend Securities Co. “I’m expecting the euro to recover sooner or later as the European Union takes more steps to maintain the current system.” Futures on Australia’s S&P/ASX 200 Index rose 0.7 percent. New Zealand’s NZX 50 Index advanced 0.2 percent in Wellington. The MSCI Asia Pacific Index has lost 9.6 percent from its high for the year on April 15 on concern a government-debt crisis in countries from Greece to Spain will spill over to other European nations. Stocks in the gauge trade at 1.49 times book value, lower than 2.15 for the Standard & Poor’s 500 Index and 1.51 for the Stoxx Europe 600 Index. Yen Weakens Futures on the S&P 500 gained 0.2 percent. The gauge advanced 0.1 percent in New York yesterday after a drop in commodity prices drove down the index as much as 1.8 percent. The euro rose yesterday against the dollar for the first time in five days, rebounding from its lowest level since April 2006 reached earlier in the day. The yen weakened to 114.84 versus the euro from 112.90 at the 3 p.m. close of Tokyo stock trading yesterday. Against the dollar, the Japanese currency depreciated to 92.65 from 92. A weaker yen boosts the value of overseas sales at Japanese companies when converted into their home currency. The London Metals Index tumbled 6 percent yesterday to the lowest level since Feb. 8. Crude oil for June delivery fell 2.1 percent in New York and dropped for a fifth session. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Japan’s Stocks Rise on Eased European Concern; Sony Climbs as Yen Falls

May 12, 2010

By Akiko Ikeda May 13 (Bloomberg) — Japanese stocks rose after pledges by Spain and the U.K. to cut their budget deficits eased concern the European debt crisis will derail the global recovery and as U.S. imports increased. Sony Corp., the maker of Bravia televisions and that gets more than 70 percent of its sales abroad, jumped 3 percent as the yen weakened. Elpida Memory Inc., the world’s third-biggest maker of computer memory, surged 4.8 percent as profit exceeded its forecast. Sojitz Corp. advanced 1.9 percent after the Nikkei newspaper said the trading company will start a solar-power business. “The actions of Spain and England to reduce deficits are encouraging to investors as they ease the debt crisis in the euro area,” said Mitsushige Akino, who oversees the equivalent of $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “Gains in the U.S. trade figures show business confidence is strengthening globally.” The Nikkei 225 Stock Average rose 1.6 percent to 10,563.57 as of 9:07 a.m. in Tokyo. The broader Topix index climbed 1.3 percent to 944.81. Standard & Poor’s 500 Index futures for June delivery fell 0.3 percent. The S&P stock gauge surged 1.4 percent to 1,171.67 in New York yesterday, as Portugal’s successful bond sale, Spain’s reduction of public wages and new U.K. Prime Minister David Cameron’s plans to cut the deficit boosted optimism that Europe’s debt crisis will ease. The Topix has gained 4.1 percent in 2010, compared with a 5.1 percent gain by the S&P 500 and a 1.1 percent increase by the Stoxx Europe 600 Index . Stocks in the Japanese benchmark are valued at 18.6 times estimated earnings , compared with 14.5 times for the S&P and 12 times for the Stoxx. To contact the reporter for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net .

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Nintendo Forecasts Annual Profit Will Drop to Lowest Level in Four Years

May 6, 2010

By Pavel Alpeyev May 6 (Bloomberg) — Nintendo Co. , the world’s largest maker of video-game players, forecast profit will fall to the lowest in four years as sales of the company’s flagship Wii console decline. Net income will probably drop 13 percent to 200 billion yen ($2.1 billion) in the 12 months ending March 2011, after declining 18 percent a year earlier, the Kyoto, Japan-based company said in a statement today. The outlook falls short of the 220.9 billion yen average of 21 analyst estimates compiled by Bloomberg. Nintendo projected the number of motion-sensing Wii consoles sold will drop for a second year, outweighing an increase portable DS player sales, as the company faces mounting competition from Sony Corp., Microsoft Corp. and Apple Inc. President Satoru Iwata plans to introduce a 3-D model of the handheld DS and a heart-rate-tracking “Vitality Sensor” accessory for the Wii this fiscal year to revive earnings growth. “Nintendo investors will need to be patient this year,” said Eiji Maeda , a JPMorgan Chase & Co. analyst. “Although the company will strengthen its software lineup for the Wii during the first half, the real contributions from the 3DS will probably materialize next year.” Operating profit, or sales minus the cost of goods sold and administrative expenses, will probably fall 10 percent to 320 billion yen as revenue declines 2.4 percent to 1.4 trillion yen, the company said. Those forecasts compare with the average analyst estimates for 349.1 billion yen in operating income and 1.39 trillion yen in revenue. Sales of the Wii will probably slide to 18 million units in the period, after declining for the first time last fiscal year, Nintendo said. Sales of the DS handheld will rise to 30 million, the company said. Yusuke Tsunoda , an analyst at Tokai Tokyo Securities Co., forecast in a March 24 report that sales of the Wii would probably fall 5 percent to 20 million units this fiscal year, while DS sales may decline 2.4 percent to 27 million units. Nintendo faces more competition than when it began sales of the Wii in 2006 and was the only major producer of motion- sensing personal gaming machines. Sony and Microsoft are now planning to introduce their own motion-sensing accessories for their video-game consoles, while Apple’s iPhone and iPad machines are being increasingly used for gaming. Nintendo fell 3.3 percent to close at 30,650 yen in Osaka trading before the announcement, narrowing its gain this year to 39 percent. The benchmark Nikkei 225 Stock Average has added 1.4 percent this year.

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Asian Stocks Decline on Slumping Chip Prices, CSL Downgrade; Elpida Drops

April 26, 2010

By Jonathan Burgos April 27 (Bloomberg) — Asian stocks declined, led by technology and health-care companies, as memory-chip prices fell and Credit Suisse Group AG downgraded blood-products maker CSL Ltd. Elpida Memory Inc. , Japan’s biggest maker of computer memory, dropped 2.4 percent in Tokyo as memory-chip prices declined to a five-week low. CSL , the world’s second-biggest maker of treatments made from blood, slipped 4.6 percent in Sydney. PetroChina Co., China’s largest oil producer, lost 1.6 percent in Shanghai on lower oil prices. The MSCI Asia Pacific Index lost 0.4 percent to 126.74 as of 11:19 a.m. in Tokyo, with three stocks falling for each one that rose. The gauge rose 1.6 percent yesterday, its biggest gain since March 17. Stocks in the index trade at 16.1 times estimated earnings, compared with 15.2 times for the Standard & Poor’s 500 Index, according to data compiled by Bloomberg. “Valuations are still expensive,” said Michiya Tomita, a Hong Kong-based fund manager for Mitsubishi UFJ Management Co., which holds $65 billion in assets. “We need to see more earnings improvement.” China’s Shanghai Composite Index slumped 1.4 percent on concern government measures to cool the property market will curb demand for raw materials and damp consumer spending. Hong Kong’s Hang Seng Index dropped 1.1 percent. Japan’s Nikkei 225 Stock Average declined 0.4 percent, while Australia’s S&P/ASX 200 Index increased 0.2 percent. New Zealand’s NZX 50 Index lost 0.3 percent. Futures on the S&P 500 were little changed today. The index fell 0.4 percent yesterday in New York as concern that proposed legislation will hurt banks overshadowed improving earnings at Caterpillar Inc. and Whirlpool Corp. After markets closed, U.S. Senate Republicans blocked Democrats from advancing their plan to overhaul Wall Street regulation. Japan’s Elpida lost 2.4 percent to 2,022 yen, while Hynix Semiconductor Inc. slumped 3 percent to 27,650 won in Seoul. The spot price for the benchmark dynamic random access memory chip sank 0.7 percent yesterday to the lowest level since March 22, according to Dramexchange Technology Inc. CSL fell 4.6 percent to A$32.38 after Credit Suisse cut the stock to “neutral” from “outperform,” citing the impact from U.S. health-care reforms. CSL tumbled 7.3 percent on April 23 when it last traded, after larger rival Baxter International Inc. cut its 2010 earnings forecast. Oil producers fell after crude prices in New York lost 0.4 percent to $83.85 in after-hours trading, extending yesterday’s 1.1 percent drop. PetroChina lost 1.6 percent to 12.01 yuan in Shanghai, while Inpex Corp. , Japan’s largest oil explorer, sank 1.9 percent to 686,000 yen. To contact the reporter for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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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 Stocks Drop in New York as U.S. Jobless Claims Rise

April 15, 2010

By Masaki Kondo and Toshiro Hasegawa April 16 (Bloomberg) — Shares of Japanese and Australian stocks fell in New York after jobless claims by Americans unexpectedly increased, raising concern the U.S. economic recovery will stall. American depositary receipts of Nissan Motor Co. , which gets 35 percent of its sales in North America, closed 0.7 percent lower from the Tokyo close. Those of Sharp Corp., a Japanese company seeking to expand its share in China’s mobile- phone market, declined 1.2 percent after that nation raised down payment ratios for some home purchases. ADRs of BHP Billiton Ltd., the world’s biggest mining company, sank 0.6 percent after commodity prices retreated. “Concern about China’s tightening may weigh on the Asian stock markets,” said Kazuhiro Takahashi , a general manager at Daiwa Securities Capital Markets Co. in Tokyo. The Bank of New York Mellon Asia ADR Price Index , which tracks American depositary receipts of the region’s companies, slid 0.4 percent. Yen-denominated futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 11,270 in Chicago yesterday, unchanged from the close in Singapore. They were bid in the pre-market at 11,270 as of 8:05 a.m. in Osaka. The Nikkei 225 closed at 11,273.79 yesterday. Futures on Australia’s S&P/ASX 200 Index dipped 0.1 percent. New Zealand’s NZX 50 Index was little changed today. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net .

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Asian Stocks Rise for Fifth Day on Fed Rate Optimism; Mining Shares Gain

April 6, 2010

By Kana Nishizawa and Kotaro Tsunetomi April 7 (Bloomberg) — Asian stocks gained, driving the MSCI Asia Pacific Index higher for the fifth straight day, as investors bet the Federal Reserve will leave the benchmark U.S. interest rate at a record low. Rio Tinto Group , the world’s third-largest mining company, rose 0.7 percent in Sydney after oil and metal prices advanced. Sumitomo Corp., which trades commodities, rose 0.8 percent in Tokyo. China Construction Bank Corp. may be active in Hong Kong after people familiar with the matter said the company plans to sell shares to raise capital. The MSCI Asia Pacific Index rose 0.3 percent to 127.75 as of 9:26 a.m. in Tokyo. The gauge has climbed 12 percent from this year’s low on Feb. 8 as improving economic data and a Fed pledge to keep borrowing costs down eased concern that budget deficits in Europe will derail the global economic recovery. “The global economy is on a recovery trend,” said Hiroichi Nishi , an equities manager at Nikko Cordial Securities Inc. “The market is moving toward summer. The winter is over.” The Nikkei 225 Stock Average rose 0.2 percent. Australia’s S&P/ASX 200 Index climbed 0.2 percent. New Zealand’s NZX 50 Index gained 0.1 percent. Futures on the Standard & Poor’s 500 Index lost 0.2 percent. The gauge advanced 0.2 percent in New York yesterday, as minutes from the last Fed policy meeting showed some central- bank officials warned of raising rates too soon. “While recent data pointed to a noticeable pickup in the pace of consumer spending during the first quarter, participants agreed that household spending going forward was likely to remain constrained by weak labor market conditions, lower housing wealth, tight credit, and modest income growth,” minutes of the March 16 Federal Open Market Committee showed. Shares in the MSCI Asia Pacific Index are priced at an average 16.7 times estimated earnings, compared with 15.3 times for the U.S. S&P 500. To contact the reporters for this story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net ； Kotaro Tsunetomi in Tokyo at ktsunetomi@bloomberg.net .

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Asian Commodity Stocks Rise on Recovery Optimism; Euro Weakens on Greece

April 5, 2010

By Darren Boey and Shani Raja April 6 (Bloomberg) — Asian commodity stocks rose, lifting the MSCI Asia Pacific Index up for the fourth straight day, on signs the global economic recovery is gathering pace. The euro fell on concern Greece will struggle to repay its debt. The MSCI Asia Pacific Index rose 0.3 percent to 127.24 as of 3:22 p.m. in Tokyo. Japan’s Nikkei 225 Stock Average dropped 0.5 percent as a stronger yen dragged export shares lower. The Australian dollar, known as the Aussie, climbed after the central bank raised interest rates for the fifth time in six meetings. The euro sank 0.8 percent to 126.23 yen from 127.25 in New York yesterday. Futures on the Standard & Poor’s Index lost 0.3 percent and they increased 0.8 percent for the Euro Stoxx 50. U.S. reports yesterday flagging growth in the country’s home sales and services industries has put the MSCI Asia Pacific Index on course for its highest close in more than 19 months. The Bank of Japan may raise its economic assessment tomorrow after its Tankan business poll showed the export-driven recovery is gaining momentum. Growth in Asia is “quite strong,” Reserve Bank of Australia Governor Glenn Stevens said today. “Recent U.S. data has been unequivocally positive which has been boosting investor risk appetite globally,” said Prasad Patkar , who helps oversee about $1.7 billion at Platypus Asset Management in Sydney. “I don’t see valuations as being a source of concern if the profit growth that is expected is delivered.” Taiwan’s Taiex Index gained 0.8 percent and Australia’s S&P/ASX 200 Index climbed 0.9 percent. Commodity Producers Taiwan Semiconductor Manufacturing Co. and Mediatek Inc. climbed at least 1.6 percent after the Economic Daily News reported that the chip companies may raise salaries by as much as 3 percent as their business outlook improved. Commodity-related companies in the MSCI Asia Pacific Index advanced amid speculation demand for raw materials will pick up. The MSCI gauge climbed 1.5 percent in the past four days. BHP Billiton advanced 1.6 percent to A$44.63. Rio Tinto Ltd., the world’s third-biggest mining company, gained 1.3 percent to A$80.64. Woodside Petroleum Ltd. , Australia’s second- biggest oil producer, climbed 1.8 percent to A$47.77. “Given the momentum of the economy, stocks aren’t expensive at all and there’s room for valuations to be lifted,” said Wei Wei , an analyst at West China Securities Co. in Shanghai. Copper for May delivery in New York advanced 1.2 percent to $7,977 a ton after rising to a 20-month high yesterday. Crude oil for May delivery lost 0.1 percent to $86.50 a barrel in electronic trading on the New York Mercantile Exchange. Yesterday, the contract rose 2.1 percent to $86.62, the highest settlement since Oct. 8, 2008. Rising Prices “We’ve seen some encouraging economic data the last few days,” said Toby Hassall , a research analyst at CWA Global Markets Pty in Sydney. “It’s keeping the global recovery story in place. Rising prices are reflecting the expectation of improving demand.” Shares of Japan’s exporters declined, dragging the Nikkei 225 Stock Average down by 0.7 percent, as a stronger yen threatened to reduce the value of overseas sales. Canon retreated 1.8 percent to 4,430 yen, having gained 6.9 percent in the past five days. Nintendo Co. , the world’s biggest maker of video-game players, dropped 1.4 percent to 32,350 yen. The yen rose to 94.08 per dollar, from 94.37 yesterday, when it touched 94.79, the lowest since Aug. 24. Europe’s currency dropped 0.5 percent to $1.3416. The euro has weakened 5.3 percent against the yen and 6.3 percent versus the greenback this year as concern Greece’s fiscal shortfall will widen and discord among European leaders over an aid package for the nation damped demand for the single currency. Beyond Greece “People are concerned that it’s not just Greece, there are some definite sovereign debt issues in the region,” said Phil Burke , chief dealer for global foreign exchange and rates at JPMorgan Chase & Co. in Sydney. “The market is still bearish on the euro overall and still wants to sell on rallies.” Greece is looking to raise up to $10 billion from U.S. investors to help cover its May borrowing requirement of about 10 billion euros ($13.4 billion), the Financial Times said. The nation needs to borrow a total of 32 billion euros this year, Petros Christodoulou , director general of the Public Debt Management Agency, said last month. The Australian dollar recently traded at 92.24 U.S. cents from 91.85 cents before the central bank increased the overnight cash rate target to 4.25 percent from 4 percent. The decision was predicted by 13 of 23 economists in a Bloomberg News survey. Yuan Forwards Chinese yuan forwards jumped by the most in nine weeks on speculation the U.S. decision to delay a report on global foreign-exchange policies due April 15 will make China more willing to let the currency resume appreciation. Twelve-month non-deliverable forwards advanced 0.3 percent to 6.6273 per dollar. The contracts reflect bets the currency will climb 3 percent from the spot rate of 6.8259. Treasuries rose as yields over 4 percent lured buyers gauging inflation will remain subdued. The yield on the benchmark 10-year note fell two basis points, or 0.02 percentage point, to 3.97 percent in Tokyo, according to data compiled by Bloomberg. The yield touched 4.0095 percent yesterday, the highest level since Oct. 16, 2008. “The fiscal year is just beginning for Japanese investors who are eager to buy, so 4 percent Treasury yields are attractive to them,” said Manabu Tamaru , a Tokyo-based senior investment manager at Baring Asset Management. “With the disinflation trend continuing, real yields are also attractive.” Credit Default Risk Indicators of corporate credit risk in the Asia-Pacific were on course to fall to the lowest level since March 17. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell 1 basis point to 93.5 basis points, Royal Bank of Scotland Group Plc prices show, while the Markit iTraxx Australia index dropped 4 basis points to 80.5 basis points, according to Westpac Banking Corp. Investors use the default-swap indexes to hedge against losses on corporate debt or speculate on creditworthiness, and the swaps typically fall as investor confidence increases. To contact the reporters for this story: Darren Boey at dboey@bloomberg.net ; Shani Raja in Sydney at sraja4@bloomberg.net .

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Australian Stocks Gain on Commodities; Japanese Futures Are Little Changed

March 17, 2010

By Masaki Kondo March 18 (Bloomberg) — Australian stocks rose as higher prices for oil and metals boosted commodity companies, while Japanese index futures were little changed. Rio Tinto Group, the world’s third-biggest mining company, gained 0.5 percent in Sydney as commodities climbed after a report showed U.S. producer prices dropped, raising speculation the Federal Reserve will be able to keep interest rates low. New York-traded securities of Mitsubishi Corp. , a Japanese trading company that gets 39 percent of its sales from commodities, climbed 0.3 percent from the Tokyo close. Those of Sumitomo Mitsui Financial Group Inc. , Japan’s No. 2 bank by market value, fell 1.1 percent after five days of gains, the longest winning stretch since the period ended Oct. 9. “It has become clearer that the Fed won’t have to rush to exit monetary easing,” said Mitsushige Akino , who oversees the equivalent of $450 million at Tokyo-based Ichiyoshi Investment Management Co. “Globally, economies are improving, but markets are awash with excess liquidity. That’s the most favorable environment for stocks.” Australia’s S&P/ASX 200 Index rose 0.2 percent to 4,860.60 as of 10:03 a.m. in Sydney. New Zealand’s NZX 50 Index advanced 0.5 percent in Wellington. Yen-denominated futures on Japan’s Nikkei 225 Stock Average expiring in June closed at 10,770 in Chicago yesterday, little changed from 10,775 in Singapore. They were bid in the pre- market at 10,740 as of 8:38 a.m. today in Osaka, Japan. Asia Vs. World The MSCI Asia Pacific Index climbed 1.6 percent yesterday to the highest level since Jan. 19 after the U.S. Federal Reserve pledged to maintain its main interest rate near zero for an “extended period.” Shares in the gauge trade at 18.9 times estimated earnings, compared with 15.1 times for the MSCI World Index of 23 developed nations. In New York, the Standard & Poor’s 500 Index climbed 0.6 percent yesterday to the highest close since September 2008. Prices paid to factories, farmers and other producers decreased 0.6 percent in February month-on-month, the Labor Department said. Economists had estimated a 0.2 percent drop. Crude oil for April delivery jumped 1.5 percent to $82.93 a barrel in New York yesterday, the highest settlement since Jan. 6. Copper futures for May delivery increased 1.6 percent. Japan’s Topix index has rallied 7.5 percent from a two- month low on Feb. 9 after a lower-than-estimated increase in U.S. consumer prices eased concern the Fed would raise interest rates. The gain has lifted the price of stocks in the index to 1.16 times book value, the highest level since Jan. 21, according to data compiled by Bloomberg. The 25-day Toraku index, a measure of daily stock winners and losers in Tokyo, climbed to 129 yesterday, the highest level since June 26. A level of more than 120 suggests the market is overheating, according to Nomura Holdings Inc. “Technically, the market is overheating, so people are enticed to lock in profit,” said Ichiyoshi’s Akino. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Panasonic Profit May Be Boosted More Than $885 Million by Sanyo Purchase

March 17, 2010

By Mariko Yasu and Maki Shiraki March 17 (Bloomberg) — Panasonic Corp. , which acquired a controlling stake in battery maker Sanyo Electric Co. in December, may boost annual profit by more than 80 billion yen ($885 million) in three years by merging operations. “Toward the end of this month, we’ll gather the sort of benefits we’ll generate by the merger,” Hitoshi Otsuki , a senior managing director in charge of Panasonic’s overseas operations, said in an interview in Tokyo yesterday. For the year ending March 2013 “80 billion yen is our target officially and we will definitely achieve it,” he said, adding it’s “definitely possible” to aim for a higher amount. Sanyo’s solar batteries, strong presence in Vietnam and close relationship with Wal-Mart Stores Inc. , the world’s largest retailer, will likely help Panasonic beat its original target, Otsuki said. The world’s largest maker of plasma televisions made its biggest acquisition last December, paying 403.8 billion yen for 50.2 percent of Sanyo , the No. 1 manufacturer of lithium-ion rechargeable batteries. “Panasonic hasn’t disclosed details of the synergy plan,” Kazuharu Miura , an analyst at Daiwa Securities Capital Markets Co. in Tokyo, said by phone today. “I’m waiting to see how each of the company’s businesses will benefit from the acquisition and how much the overall profit will expand.” The purchase will likely boost Panasonic’s operating profit, or sales minus the cost of goods sold and administrative expenses, by 80 billion yen in the 12 months ending March 2013, the company said December 2008 when it first disclosed the purchase plan. May Sell Assets The two companies aren’t discussing additional job cuts and may sell some of their assets as they consolidate operations, Otsuki said. Panasonic has no plan to make Sanyo a wholly owned unit, he said. Panasonic rose 1.7 percent to close at 1,343 yen in Tokyo trading. Japan’s benchmark Nikkei 225 Stock Average gained 1.2 percent. Last month, Osaka-based Panasonic raised its operating profit forecast by 25 percent, as cuts in fixed and material costs lead to a recovery in earnings from consumer electronics and appliances. Operating profit will probably reach 150 billion yen in the year ending March 31, compared with an earlier forecast of 120 billion yen, Panasonic said Feb. 5. Sales may total 7.35 trillion yen, 5 percent more than previously projected. Analysts expect the company to post a net income of 115 billion yen in the year starting April 1, from a loss of 130 billion yen, according to the median of 19 estimates compiled by Bloomberg. To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@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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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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Asian Stocks Rise on U.S. Jobs, Bank of Japan Speculation; Billabong Gains

March 4, 2010

By Shani Raja and Toshiro Hasegawa March 5 (Bloomberg) — Asian stocks rose for the fourth time in five days after U.S. jobless claims fell and the Nikkei newspaper reported that the Bank of Japan may further loosen monetary policy. Billabong International Ltd. , a surfwear maker that gets 44 percent of its revenue from the Americas, climbed 2.9 percent in Sydney. Sony Corp. , the maker of the PlayStation 3 game machine, rose 2.7 percent as a weaker yen boosted the outlook for export earnings. STX Pan Ocean Co. and Korea Line Corp., South Korea’s biggest bulk-shipping lines, advanced more than 2 percent in Seoul after an index of freight rates rose the most since July. The U.S. economy is “steadily recovering,” said Juichi Wako , a senior strategist at Tokyo-based Nomura Holdings Inc. “If implemented, the BOJ’s measures may widen a gap in the U.S.’s and Japan’s borrowing costs and halt a further appreciation of the yen.” The MSCI Asia Pacific Index advanced 0.7 percent to 120.51 as of 9:46 a.m. in Tokyo. The gauge has fallen 4.9 percent from a 17-month high on Jan. 15 on concern over budget deficits in Europe and speculation governments around the world will start withdrawing economic stimulus policies. Japan’s Nikkei 225 Stock Average climbed 2 percent and South Korea’s Kospi Index gained 0.7 percent. Australia’s S&P/ASX 200 Index rose 0.5 percent, while New Zealand’s NZX 50 Index lost 0.1 percent, even after the Treasury Department said the nation’s budget cash deficit in the seven months ended Jan. 31 was narrower than forecast. To contact the reporters for this story: Shani Raja in Sydney at sraja4@bloomberg.net . Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net .

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Konica Minolta May Beat Its Own Operating Profit Target, President Says

March 3, 2010

By Mariko Yasu and Yoshinori Eki March 3 (Bloomberg) — Konica Minolta Holdings Inc. ’s profit this year may exceed the company’s forecast on sales of new printers and stronger demand for components, the president said. “New models of color printers are improving our earnings even as the printer market continues to be severe,” President Masatoshi Matsuzaki said in an interview yesterday in Tokyo, where the company is based. “Our components division is also improving,” as demand for liquid-crystal displays started to pick up, he said, adding the company will probably beat its estimate for operating profit. The maker of printers, scanners and film used in liquid- crystal displays in October forecast operating profit will fall 40 percent to 34 billion yen ($382 million) in the year ending March 31, mainly because of sluggish demand for office printers. The company is seeking a growth driver and aims to tap increasing demand for renewable-energy technologies. Konica Minolta advanced 1.4 percent to 942 yen as of the 11 a.m. break on the Tokyo Stock Exchange after gaining as much as 2.1 percent. The benchmark Nikkei 225 Stock Average added 0.3 percent. Konica Minolta invested $20 million in Lowell, Massachusetts-based solar technology company Konarka Technologies Ltd. as part of an alliance to produce solar panels, the companies said yesterday. They plan to form a venture in Japan to produce thin-film photovoltaic panels, according to a statement. To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net .

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Australian Stocks, Japan Shares in U.S. Fall as China Acts to Slow Economy

February 14, 2010

By Masaki Kondo and Satoshi Kawano Feb. 15 (Bloomberg) — Australian stocks and Japanese shares traded in New York fell after China stepped up measures to slow economic growth. BHP Billiton Ltd. , the world’s biggest mining company, declined 0.2 percent in Sydney. New York-traded securities of Komatsu Ltd. , a Japanese machinery maker that counts China as its fastest-growing market, retreated 2 percent. Those of Tokio Marine Holdings Inc. , Japan’s biggest casualty insurer, rose 2.8 percent after the company boosting its annual earnings forecast. “The tighter monetary policies are prompting investors to expect a temporary slowdown in China, although they’ll cool the nation’s overheating economy,” said Ryuta Otsuka , a strategist at Toyo Securities Co. in Tokyo. Australia’s S&P/ASX 200 Index fell 0.1 percent to 4,558.50 as of 10:01 a.m. in Sydney. New Zealand’s NZX 50 Index lost 0.5 percent in Wellington. The Bank of New York Mellon Japan ADR Price Index , which tracks American depositary receipts of Japanese companies, slid 0.3 percent on Feb. 12. Futures on Japan’s Nikkei 225 Stock Average expiring in March closed at 10,090 in Chicago on Feb. 12, little changed from 10,100 in Osaka. China ordered banks to set aside more deposits as reserves for the second time in a month as loan growth quickened and property prices surged. The reserve requirement will increase 0.5 percentage point effective Feb. 25, the People’s Bank of China said on Feb. 12. China’s markets are closed this week for the Lunar New Year holidays. 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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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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Asian Stocks Fluctuate as Banks, Carmakers Drop; BHP, Nippon Oil Advance

January 18, 2010

By Anna Kitanaka and Shani Raja Jan. 19 (Bloomberg) — Asian stocks fluctuated as Australian banks and Japanese exporters of cars and electronics fell, while commodity producers rose on oil and metal prices. Commonwealth Bank of Australia, the country’s biggest bank, retreated 1.8 percent in Sydney. Toyota Motor Corp. , the world’s biggest carmaker and which gets about 31 percent of revenue from North America, fell 1 percent in Tokyo after the dollar weakened to its lowest level in almost a month against the yen. Nippon Oil Corp., Japan’s biggest refiner, rose 1.4 percent. The MSCI Asia Pacific Index was little changed at 126.18 at 10:39 a.m. in Tokyo, with about as many stocks advancing as declining. The index climbed 49 percent in the past year through yesterday amid signs of a global recovery. “Markets are pausing for a breath,” said Prasad Patkar , who helps manage about $1.6 billion at Platypus Asset Management in Sydney. “Expected corporate earnings are now factoring in the economic recovery. For markets to press on from here upwards, we’ll need to see the earnings growth come through.” Japan’s Nikkei 225 Stock Average was little changed in Tokyo, and Australia’s S&P/ASX 200 Index dropped 0.8 percent in Sydney. South Korea’s Kospi Index added 0.2 percent in Seoul. The yen strengthened to as much as 90.52 against the dollar today from 91.04 at yesterday’s close of stock trading in Tokyo, eroding overseas income for Japanese companies when converted into their home currency. Crude oil for February delivery rose 0.3 percent in New York yesterday, breaking a five-day losing streak. A gauge of six metals in London, including copper and zinc, added 0.7 percent, while gold for immediate delivery advanced 0.2 percent yesterday. To contact the reporters for this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net ; Shani Raja in Sydney at sraja4@bloomberg.net .

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Asian Stocks Fall on JPMorgan Banking Loss, Commodity Prices; Mizuho Drops

January 17, 2010

By Anna Kitanaka and Toshiro Hasegawa Jan. 18 (Bloomberg) — Asian stocks fell, dragging the MSCI Asia Pacific Index lower for the first time in three days, as JPMorgan Chase & Co. reported a loss in retail banking, U.S. consumer confidence trailed forecasts and commodity prices sank. Mizuho Financial Group Inc. , Japan’s third-biggest bank by market value, lost 1 percent in Tokyo. Canon Inc. , the world’s largest camera maker and which earns more than 75 percent of its revenue outside Japan, fell 0.9 percent. BHP Billiton Ltd. , the world’s biggest mining company, sank 1.2 percent in Sydney. Sims Metal Management Ltd., the world’s biggest recycler of scrap metal, slumped 4.2 percent after it was downgraded to “neutral” from “overweight” at JPMorgan Chase & Co. “Expectations for corporate earnings are so high that investors tend to focus on bad things,” said Tomochika Kitaoka , a senior strategist in Tokyo at Mizuho Securities Co. The MSCI Asia Pacific Index dropped 0.6 percent to 126.05 at 9:32 a.m. in Tokyo. Material companies sank the most among the measure’s 10 industry groups. The gauge has risen 48 percent in the past year on signs of recovery in the region’s economies. Stocks in the MSCI measure are valued at 20 times estimated net income, compared with 15 times for the U.S. Standard & Poor’s 500 Index and 13 times for Europe’s Dow Jones Stoxx 600 Index. Japan’s Nikkei 225 Stock Average sank 1.3 percent. Australia’s benchmark S&P/ASX 200 Index dropped 0.3 percent. A gauge of the nation’s inflation showed consumer prices surged in December at the fastest pace in nine months, according to an index compiled by TD Securities Ltd., increasing the central bank’s scope to raise interest rates in February. Futures on the S&P 500 lost 0.2 percent. The gauge slid 1.1 percent on Jan. 15 after JPMorgan, the largest U.S. bank by market value, reported fourth-quarter net income that missed analyst estimates. The company said it was “cautious” about the outlook for consumer loan defaults as its retail unit posted the first quarterly loss since the first quarter of 2008. Commodity-related shares in Asia fell after copper futures in New York sank 0.6 percent on Jan. 15. Crude-oil futures dropped 1.8 percent and gold declined 1.1 percent the same day. To contact the reporter for this story: Anna Kitanaka in Tokyo akitanaka@bloomberg.net .

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Japan Air Said to Consider Dissolving Pension Fund If Retirees Block Cuts

January 10, 2010

By Kiyotaka Matsuda Jan. 10 (Bloomberg) — Japan Airlines Corp. , Asia’s largest carrier, may dissolve its pension fund if retirees reject a proposed 30 percent cut in payouts, two people familiar with the matter said. The state-run agency restructuring Japan Air aims to close the fund if the airline doesn’t win the needed agreement of more than two-thirds of 9,000 retirees, the people said. That would result in benefits being slashed by about 65 percent, they said, declining to be named before any decision is made public. Japan Air has lobbied retirees to accept lower pensions as the carrier’s largest creditors are set to agree on a court-led bankruptcy. The Tokyo-based airline, also known as JAL, has already won approval from current employees for a 50 percent reduction in pension benefits as it is forecast to post a record loss. “The company hasn’t decided anything,” Satoru Tanaka , a Japan Airlines spokesman, said. “It is making every effort to get approval.” The Yomiuri newspaper earlier today reported on the plan to dissolve the pension fund, which has 291.8 billion yen ($3.15 billion) in assets, the paper said. The former employees have until Jan. 22 to accept or reject the proposed cuts. About 45 percent had accepted them as of Jan. 9. Pension reductions are part of wider cost cuts aimed at helping return the airline to profit after three losses in four years. JAL is also cutting jobs and routes following a slump in international travel demand and is seeking loan write-offs. Banks Agree JAL’s biggest banks are set to agree to a bankruptcy proceeding, people familiar with the matter said yesterday. Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. are prepared to go along with a proposed court-led reconstruction of the airline, while state-owned Development Bank of Japan already agreed to the plan, people said. JAL owed 429 billion yen to the banks, its four largest creditors, at the end of March, according to the company. The carrier will file for bankruptcy in the week starting Jan. 18, and the Enterprise Turnaround Initiative Corp. will provide financial aid to keep the airline in operation, two people familiar with the negotiations said yesterday, declining to be named. Shares of Japan Airlines fell 12 percent to 67 yen at the closing of trading on Jan. 8. The stock slumped 68 percent last year, compared with a 19 percent gain by the benchmark Nikkei 225 Stock Average. To contact the reporter on this story: Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

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Kan Is Named Japan’s Finance Minister After Fujii Resigns Over Poor Health

January 6, 2010

By Takashi Hirokawa Jan. 6 (Bloomberg) — Japanese Prime Minister Yukio Hatoyama named Naoto Kan , the deputy premier, as his new finance minister, replacing Hirohisa Fujii , who stepped down over health concerns. Kan will remain deputy prime minister, Hatoyama told reporters today in Tokyo. Fujii is the first Cabinet member to depart after the Democratic Party of Japan gained power in September by unseating the Liberal Democratic Party, which dominated the nation’s political landscape for half a century. Kan will take charge of getting parliamentary approval for a record 92.3 trillion yen ($1 trillion) budget that aims to arrest economic stagnation without swelling the world’s largest public debt. Kan “was involved in the budget process and given his policy credentials was the most likely choice,” said Koichi Nakano , a political science professor at Sophia University in Tokyo. Kan, 63, is a former health minister. Late last year, he pressed the Bank of Japan to do more to fight deflation and expressed concern that a surging yen might impede the export-led recovery. On Dec. 17, he said that a weaker Japanese currency was “favorable” and that he was glad that it had retreated from the previous month’s 14-year peak. Scope of Brief As deputy leader and economic and fiscal policy chief, Kan may be too stretched to take on the finance portfolio, Hiroaki Muto , a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo, said before the appointment. Investors earlier shrugged off local media reports of Fujii’s departure. The Nikkei 225 Stock Average rose 0.5 percent in Tokyo at the close today. Yields on benchmark 10-year notes climbed one basis point to 1.335 percent. The yen traded at 92.49 per dollar at 10:38 a.m. in London, about 8 percent cheaper than its 14- year high of 84.83 reached on Nov. 27. To contact the reporter on this story: Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net .

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Blackstone’s Wien Sees Faster Economic Recovery, No Gain in S&P 500 Index

January 4, 2010

By Lu Wang Jan. 4 (Bloomberg) — Blackstone Group LP’s Byron Wien , who correctly predicted rallies in equities, gold and oil last year, said U.S. gross domestic product will expand almost twice as fast as economists forecast in 2010 while the Standard & Poor’s 500 Index ends the year unchanged. An advance in stocks in the first half will give way to losses as the S&P 500 drops as low as 1,000 before finishing 2010 where it began, Wien said in his annual “Ten Surprises” list, published since 1986. As real economic growth climbs toward 5 percent, the Federal Reserve will start boosting interest rates in the second quarter, pushing its target for overnight loans between banks to 2 percent, he said. The 10-year Treasury note’s yield will surpass 5.5 percent during the year because of “heavy borrowing” by the government, he said. “Even though the economy is strong and earnings exceed expectations, rising interest rates and full valuations present a problem” for stocks, said Wien, 76. “Concern about longer- term growth and obligations to reduce leverage at both the public and private level unsettle investors.” Wien’s prediction that a growing economy will boost U.S. earnings matches the outlook of most Wall Street strategists, who say the S&P 500 will rise about 10 percent in 2010, according to data compiled by Bloomberg. Wien, former chief U.S. strategist for Morgan Stanley, breaks from the consensus with his prediction that government borrowing and climbing valuations will snuff out equity returns for American investors. Wien is vice chairman of Blackstone Advisory Services. From 2005 to 2009, he was chief investment strategist for the Pequot Capital Management Inc. hedge fund. He picked Japan as the best-performing “major industrialized” market for this year, saying the Nikkei 225 Stock Average will rally above 12,000, a 13 percent gain from the 2009 close. To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net

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Japan Stocks Rise on Government’s Growth Outlook, Rise in Factory Output

December 27, 2009

By Kana Nishizawa and Toshiro Hasegawa Dec. 28 (Bloomberg) — Japanese stocks rose, after the government said the world’s second-largest economy will expand for the first time in three years, and after the nation’s November industrial production climbed for a ninth month. Isuzu Motors Ltd. , Japan’s largest maker of light-duty trucks, rose 2.9 percent. The Cabinet office said Japan’s gross domestic product will probably expand 1.4 percent in the year starting April 2010. Hitachi Construction Machinery Co., the world’s largest maker of giant excavators, advanced 1.9 percent. Japan’s industrial production rose 2.6 percent, according to the Trade Ministry, 0.1 percent more than economists’ estimates. “A positive industrial production report would prove the strength of the economy, relieving concerns for a double dip recession,” said Tomochika Kitaoka , a senior strategist at Mizuho Securities Co. in Tokyo. The Nikkei 225 Stock Average climbed 0.9 percent to 10,584.05 as of 9:26 a.m. in Tokyo. The broader Topix index added 0.7 percent to 915.61, with about four stocks rising for three that fell. The Topix index has gained 6.5 percent this year, compared with 25 percent by the Standard & Poor’s 500 Index in the U.S. and 27 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the Topix are valued at an average of 38.3 times estimated earnings, compared with an average of 18.2 times for the S&P 500 and 15.8 times for the Dow Jones Stoxx 600 index. To contact the reporters for this story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net ; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net .

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Asian Mining Stocks Rise on Metals; Mitsui O.S.K. Falls on Shipping Rates

December 14, 2009

By Shani Raja Dec. 15 (Bloomberg) — Asian mining stocks rose after copper and platinum prices climbed. Shipping companies paced declines among Japanese equities after cargo rates fell. Platinum Australia Ltd. , which owns mines in South Africa and Australia, surged 4.6 percent in Sydney. BHP Billiton Ltd. , the world’s biggest mining company, climbed 1 percent as JPMorgan Chase & Co. upgraded the stock on higher commodity- price forecasts. Mitsui O.S.K. Lines Ltd., Japan’s No. 2 shipping line, fell 1.3 percent after the Baltic Dry Index slumped for a sixth day. The MSCI Asia Pacific Index was little changed at 120.45 as of 10:22 a.m. in Tokyo. The gauge has climbed 35 percent this year, set for its biggest annual gain since 2003, on signs government spending packages and lower interest rates are reviving the global economy. “There’s just a general feeling that we are winding down for New Year and the bulk of the buying has been done this year,” said Chris Weston , an institutional dealer at IG Markets in Melbourne. “We’re just lacking the catalyst to really attract buyers at present. Traders are more happy to trade individual news stories.” Japan’s Nikkei 225 Stock Average lost 0.4 percent. Australia’s S&P/ASX 200 Index rose 0.8 percent, while New Zealand’s NZX 50 Index added 0.3 percent. Futures on the Standard & Poor’s 500 Index were little changed. The gauge rose 0.7 percent to the highest since October 2008, as Abu Dhabi agreed to provide financing to Dubai’s financial support fund, allowing Dubai World to repay $4.1 billion of Islamic bonds that were due yesterday. The MSCI Asia Pacific Index has climbed 71 percent from a more than five-year low on March 9, outpacing gains of 65 percent by the S&P 500 and 56 percent for Europe’s Dow Jones Stoxx 600 Index . Stocks in the benchmark are valued at 22 times estimated earnings, compared with 18 times for the S&P and 16 times for the Stoxx. To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net .

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Japanese Stocks Decline on Weaker Economic Expansion; Mizuho, Honda Drop

December 8, 2009

By Akiko Ikeda and Toshiro Hasegawa Dec. 9 (Bloomberg) — Japanese stocks fell after a report showed the economy grew more slowly than expected in the third quarter and the dollar weakened against the yen. Mizuho Financial Group Inc. , Japan’s third-biggest lender by market value, retreated 3 percent. Honda Motor Co. , which derives almost 85 percent of its sales abroad, lost 1.5 percent. Mitsubishi Corp. , Japan’s biggest commodities trader, dropped 2.2 percent after oil and gold prices declined. The Nikkei 225 Stock Average fell 1.1 percent to 10,024.45 as of 9:09 a.m. in Tokyo. The broader Topix index declined 1.1 percent to 887.08. “Concerns remain about currencies as well as overseas credit risks,” said Hiroichi Nishi , an equities manager at Nikko Cordial Securities Inc. in Tokyo. The Topix rose 4.4 percent this year to yesterday, the smallest return among the world’s 40 largest stock markets. The Standard & Poor’s 500 Index has gained 21 percent in 2009, while the Dow Jones Stoxx 600 Index has climbed 23 percent. Stocks in the Japanese benchmark are valued at 37 times estimated earnings , compared with 17 times for the S&P and 15 times for the Stoxx. In New York, the Standard & Poor’s 500 Index declined 1 percent yesterday, led by commodity producers. Fitch cut Greece’s credit rating one step to BBB+, the third-lowest on the investment-grade scale, and said the outlook for the rating is negative. Standard & Poor’s yesterday put the country’s rating on watch for a possible downgrade. Oil, Gold, Yen Crude oil for January delivery dropped 1.8 percent to $72.62 a barrel in New York, the lowest settlement since Oct. 9. Prices have fallen for five days, the longest losing streak since July. Gold futures for February delivery fell 1.8 percent to $1,143.40 an ounce in New York. The yen appreciated to 88.31 against the dollar in early trading today in Tokyo, compared with 88.90 at the 3 p.m. close of stock trading yesterday. Against the euro, Japan’s currency strengthened to 129.83 from 131.96. The stronger yen reduces the value of overseas revenue at Japanese companies when converted into their home currency. Japan’s economy expanded less than initially estimated in the third quarter as companies cut spending in the wake of the country’s deepest postwar recession. Gross domestic product rose at an annual 1.3 percent pace, slower than the 4.8 percent reported in preliminary figures last month, the Cabinet Office said today in Tokyo. The median estimate of 17 economists surveyed was for 2.8 percent growth. To contact the reporter for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net .

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Japanese Stock Futures, Australia’s Index Fall on Concern Rally Overdone

November 30, 2009

By Akiko Ikeda Dec. 1 (Bloomberg) — Japanese stock futures and Australian shares fell on speculation yesterday’s rally was excessive based on the outlook for growth in company earnings. U.S.-traded receipts of Mitsubishi UFJ Financial Group Inc. , Japan’s largest bank by market value, declined 1.7 percent from the closing price in Tokyo yesterday, when the stock surged 8.6 percent. Those of Mizuho Financial Group Inc. , the third-biggest, also lost 1.7 percent, following a 9.5 percent climb in the Tokyo-traded shares. Rio Tinto Group, the world’s third-largest mining company, retreated 0.6 percent today in Sydney after yesterday’s 4.5 percent increase, the steepest gain in two weeks. The advances swelled the average price of stocks in Japan’s Nikkei 225 Stock Average to 37.6 times estimated earnings, more than double the level of 17 times for the MSCI World Index and 17.4 times for the Standard & Poor’s Index. “There’s no fundamental reason to buy into Japanese stocks,” said Fumiyuki Nakanishi , a strategist at Tokyo-based SMBC Friend Securities Co. Futures on the Nikkei 225 expiring in December closed at 9,260 in Chicago yesterday, compared with 9,305 in Singapore. They were bid in the pre-market at 9,260 in Osaka, Japan, at 8:05 a.m. local time today. New Zealand’s NZX 50 Index added 0.5 percent in Wellington today. Australia’s S&P/ASX 200 Index slid 0.4 percent in Sydney. The central bank will raise its benchmark interest rate by a quarter percentage point today for a record third-straight month as evidence mounts that the nation’s economy is strengthening, economists say. New York, Dubai In New York, the Standard & Poor’s 500 Index added 0.4 percent yesterday as concern eased over a possible default by Dubai World. Government-controlled Dubai World said it is in “constructive” initial talks with banks to restructure about $26 billion in debt. “The market will maintain a wait-and-see attitude, since we aren’t sure how big the bad debts from the Dubai shock might be,” Nakanishi said. The MSCI Asia Pacific Index has climbed 67 percent from a more than five-year low on March 9, outpacing gains of 62 percent by the S&P 500 and 51 percent for Europe’s Dow Jones Stoxx 600 Index . Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P and 15 times for the Stoxx. In Jakarta, PT Energi Mega Persada , the smaller of Indonesia’s two listed oil companies, said its nine-month net loss widened to 347.9 billion rupiah ($36.7 million) from a net loss of 71.2 billion rupiah a year earlier. To contact the reporter for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net .

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Japanese Stocks Drop as Dollar Weakens Below 85 Yen, Commodities Decline

November 26, 2009

By Masaki Kondo and Satoshi Kawano Nov. 27 (Bloomberg) — Japanese stocks fell after commodity prices declined and the dollar depreciated to a 14-year low against the yen, dimming the overseas earnings prospects at exporters of cars and electronics. Inpex Corp. , Japan’s largest oil and gas explorer, sank 1.8 percent, and Mitsui Mining & Smelting Co. slid 3.2 percent. Toyota Motor Corp. lost 2.1 percent after the U.S. currency weakened below 85 yen. Shimizu Corp. was set to fall after Daiwa Securities Group Inc. said Japanese builders may fail to receive part of revenue from Dubai as the Middle Eastern nation’s state- owned company asked to postpone debt payments. “Commodity prices are seen as a barometer of investors’ appetite for risk,” said Juichi Wako , a senior strategist at Tokyo-based Nomura Holdings Inc. “Dubai’s debt problem ignited concern credit turmoil will break out again. People paid too much attention to foreign exchange yesterday and somehow neglected news about Dubai.” The Nikkei 225 Stock Average declined 1.4 percent to 9,256.69 as of 9:04 a.m. in Tokyo. The broader Topix index fell 1.1 percent to 820.11. This morning, Japan’s statistics bureau released its reports on the nation’s unemployment rate and consumer prices. Prices excluding fresh food fell 2.2 percent last month year-on- year, while the joblessness rate declined to 5.1 percent in October from 5.3 percent a month earlier. U.S. markets were closed yesterday for the Thanksgiving holiday. Europe’s Dow Jones Stoxx 600 Index dived 3.3 percent, the most since April 20, after Dubai World, the state-owned holding company, sought to delay debt payments. Dubai borrowed $80 billion in a four-year construction boom that reduced its reliance on falling oil supplies and created the region’s tourism and financial hub. The dollar depreciated to as low as 84.83 per yen today, the weakest since July 1995. A weaker dollar reduces the value of overseas sales at Japanese companies when repatriated. Crude oil for January delivery fell 1.7 percent to $76.23 a barrel in electronic trading in New York yesterday, while copper dropped 2.3 percent. Gold for immediate delivery declined 0.3 percent to $1,188.38 an ounce in London. 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 Fall on Ratings, Commodities; Topix Drops for Eighth Day

November 19, 2009

By Akiko Ikeda and Toshiro Hasegawa Nov. 20 (Bloomberg) — Japan’s Topix index fell for an eighth day, its longest losing streak since July, after Merrill Lynch & Co. cut its outlook on the global semiconductor industry and commodities prices retreated. Advantest Corp. , the world’s biggest maker of memory-chip testers, lost 2.4 percent. Micronics Japan Co. , a rival, sank 3.1 percent as the company posted a full-year loss. Mitsubishi Corp. , Japan’s biggest commodities trader, declined 1.6 percent after oil and metal prices decreased. “Investors are rushing to sell off stocks,” said Juichi Wako , a senior strategist at Tokyo-based Nomura Holdings Inc. “Since sentiment is bad, any news could drag shares lower.” The Nikkei 225 Stock Average declined 0.8 percent to 9,471.41 as of 9:03 a.m. in Tokyo. The broader Topix index fell 0.7 percent to 831.48, on course for the lowest since April 28. In New York, the Standard & Poor’s 500 Index fell 1.3 percent yesterday as Intel Corp. and Texas Instruments Inc. lost at least 3.4 percent after Bank of America Corp.’s Merrill Lynch unit cut its ratings on the chipmakers. Crude oil for December delivery retreated for the fist time in four days yesterday, plunging 2.7 percent to $77.46 a barrel in New York. The London Metals Index , a measure of six metals including copper and zinc, sank 1.5 percent yesterday, the most this month. To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net ; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net .

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Asian Stocks Gain as Commodity Prices Rise; Sharp Climbs on Broker Upgrade

November 17, 2009

By Akiko Ikeda and Toshiro Hasegawa Nov. 18 (Bloomberg) — Asian stocks rose, led by mining and technology companies, as commodities prices increased and a brokerage boosted its investment rating on Sharp Corp. BHP Billiton Ltd. , the world’s No. 1 mining company, gained 1.9 percent in Sydney after oil and metal prices advanced. to S$1.13. STX Pan Ocean Co. , South Korea’s biggest bulk carrier, rose 0.8 percent after the Baltic Dry Index of shipping rates climbed for a 14th day. Sharp, Japan’s largest maker of liquid- crystal displays, added 1.5 percent after JPMorgan Chase & Co. lifted the stock to “neutral” from “underweight.” “The increase in commodity prices and the 14th straight gain for the Baltic Dry Index show the global economy is recovering, even though the recovery lacks strength,” said Hiroichi Nishi , an equities manager at Nikko Cordial Securities Inc. in Tokyo. The MSCI Asia Pacific Index added 0.3 percent to 119.05 as of 9:51 a.m. in Tokyo. The gauge has climbed 69 percent from a more than five-year low on signs of a global economic recovery. Japan’s Nikkei 225 Stock Average advanced 0.5 percent to 9,780.21. Australia’s S&P/ASX 200 Index rose 1 percent and South Korea’s Kospi Index climbed 1.5 percent. In New York, the Standard & Poor’s 500 Index added 0.1 percent yesterday, buoyed by commodity companies as gold and copper climbed, and crude oil rose for a second day to $79.14 a barrel. In London, the Baltic Dry Index , a measure of shipping rates for commodities, advanced for a 14th day to the highest since September 2008. The MSCI Asia Pacific Index has climbed 33 percent this year, on course for its steepest annual increase since 2003. It has outpaced gains of 23 percent by the S&P 500 and 26 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the Asian benchmark are valued at 22 times estimated earnings, compared with 18 times for the S&P and 16 times for the Stoxx. To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net ; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net .

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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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Asian Stocks Rise on Commodity Prices, Brokerage Upgrades; Axa Asia Gains

November 9, 2009

By Patrick Rial and Akiko Ikeda Nov. 10 (Bloomberg) — Asian stocks climbed, lifting the MSCI Asia Pacific Index for a third day, as a rally in commodities boosted materials producers and brokerages upgraded Australian financial shares. Newcrest Mining Ltd. , Australia’s biggest gold producer, added 1 percent as bullion advanced to a record. Commonwealth Bank of Australia rose 1.3 percent after UBS AG recommended buying the shares and Axa Asia Pacific Holdings Ltd. gained 2.6 percent after Credit Suisse Group AG lifted the stock to “neutral.” Hyundai Motor Co. , South Korea’s largest automaker, rallied 3.4 percent after China’s auto sales climbed. “A rise in gold futures will lure investors and gold- related stocks will be bought,” said Fumiyuki Nakanishi , a strategist at Tokyo-based SMBC Friend Securities Co. The MSCI Asia Pacific Index gained 0.8 percent to 118.53 as of 10:18 a.m. in Tokyo, set to close at the highest level since Oct. 26. Japan’s Nikkei 225 Stock Average rose 1.4 percent to 9,950.19. South Korea’s Kospi Index added 1.2 percent, while Australia’s S&P/ASX 200 Index advanced 1.2 percent. Futures on the Standard & Poor’s 500 Index were little changed. The gauge advanced 2.2 percent yesterday for its sixth straight increase as the Group of 20 nations pledged to maintain stimulus measures until economic recoveries take hold. The MSCI Asia Pacific Index has climbed 68 percent from a more than five-year low on March 9, exceeding gains by the S&P 500 and Europe’s Dow Jones Stoxx 600 Index. Stocks in the benchmark are valued at 22 times estimated earnings, compared with 17 times for the S&P and 15 times for the Stoxx. Gold Rises Newcrest added 1 percent to A$35.65. Fortescue Metals Group Ltd., Australia’s third-largest iron ore producer, surged 3.6 percent to A$4.04. Mitsui & Co. , which generates more than half its profits from commodities dealing, climbed 2.8 percent to 1,201 yen. Gold futures for December delivery added 0.2 percent to $1,104 an ounce in New York after reaching a record $1,111.70 yesterday. Crude oil climbed 2.6 percent to $79.43 a barrel. The London Metals Index, a measure of six metals including copper and zinc, gained 0.9 percent. Commonwealth Bank rose 1.3 percent to A$55.82. The nation’s biggest lender was raised to “buy” from “neutral” at UBS. The company said yesterday first-quarter unaudited cash profit totaled about A$1.4 billion ($1.3 billion). Axa Asia Pacific , which yesterday rejected an unsolicited $10 billion takeover bid from parent Axa SA and wealth manager AMP Ltd., gained 2.6 percent to A$5.85. Credit Suisse lifted the shares to “neutral” from “underperform.” Hyundai Motor, which cited growth in China for its record quarterly profit in the three months to Sept. 30, gained 3.4 percent to 106,000 won. NSK Ltd. , a maker of bearings for autos, added 2.7 percent to 582 yen. JTEKT Corp., a maker of power steering, jumped 2.7 percent to 989 yen. China’s passenger-car sales rose 76 percent last month as economic growth and government stimulus measures spurred demand in the world’s largest auto market. Sales climbed to 946,400 units, the China Association of Automobile Manufacturers said. To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net .

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U.S. Bond Yield `Cloud’ May Signal Stock-Market Drop: Technical Analysis

November 6, 2009

By Patrick Rial Nov. 6 (Bloomberg) — Global stocks may be headed for a “correction” as an increase in U.S. 10-year yields prompts a reduction of carry trades, according to Citigroup Inc. The yield on 10-year government bonds climbed 37 basis points from a July 31 low to Aug. 8. Using that range, the resistance level stands at 3.55 percent from a low of 3.18 percent on Oct. 1, said Yutaka Yoshino , chief technical analyst at Citigroup in Tokyo, who uses the Japanese technical analysis method of “ichimoku kinko,” which looks at wave patterns and repeating trends. Yields move inversely to bond prices and 1 basis point is equal to 0.01 percentage point. “If we pass that 3.55 level on the yield, we stop being in a rebound phase and enter into a rising trend,” said Yoshino. “Inflation concerns are starting to creep in and the Federal Reserve has no control over long-term interest rates.” The yield on the 10-year note finished at 3.53 percent yesterday and will keep rising should it break above the resistance level, Yoshino said. Rising U.S. interest rates mean investors can’t borrow as cheaply in dollars to fund purchases of higher-yielding assets including stocks, a strategy known as a carry trade, he said. The Dow Jones Industrial Average could decline 14 percent to as low as 8,600 and the Nikkei 225 Stock Average may slide 13 percent to 8,450, he said. Fed officials said on Nov. 4 they’re more optimistic about the economic outlook and maintained a commitment to keeping interest rates near zero for an “extended period.” The central bank specified for the first time that policy will stay unchanged as long as inflation expectations are stable and unemployment fails to decline. Ichimoku kinko , a strategy developed by a Japanese journalist prior to World War II, translates as “one glance equilibrium chart” because of the cloud-like patterns formed by trend lines that make it easy to understand at a glance. The style of analysis is similar to the Elliott Wave theory developed by accountant Ralph Nelson and popularized by Robert Prechter . Technical analysts make predictions based on patterns in price charts and market data. To contact the reporter for this story: Patrick Rial in Tokyo at prial@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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Asian Stocks Fall on U.S. Consumer Report, CIT Collapse; Sony Drops on Yen

November 1, 2009

By Masaki Kondo and Kana Nishizawa Nov. 2 (Bloomberg) — Asian stocks slumped, led by finance and electronic companies, after U.S. commercial lender CIT Group Inc. filed for bankruptcy and spending by American consumers fell, damping confidence in the global economic recovery. Commonwealth Bank of Australia sank 2.9 percent. James Hardie Industries NV , the biggest seller of home siding in the U.S., retreated 5.6 percent in Sydney. Sony Corp. dropped 4.9 percent even after narrowing a loss forecast as the stronger yen dimmed its earnings prospects. Mitsubishi Corp. , a Japanese trading company that gets 39 percent of its sales from commodities, declined 3.6 percent after commodity prices slid. The MSCI Asia Pacific Index slumped 1.2 percent to 115.11 as of 9:55 a.m. in Tokyo. The gauge has surged 63 percent from a more than five-year low on March 9 amid signs lower borrowing costs and spending packages are reviving the global economy. “I can’t expect government stimulus measures to continue to shore up company earnings,” said Hiroshi Morikawa , a senior strategist at MU Investments Co., which manages the equivalent of $14 billion. “Doubt is rapidly growing that corporate profits will continue to improve next year.” Japan’s Nikkei 225 Stock Average lost 2.5 percent, while Australia’s S&P/ASX 200 Index dropped 2.1 percent. Futures on the U.S. Standard & Poor’s 500 Index added 0.4 percent. The gauge fell 2.8 percent on Oct. 30, the most since July 2. Spending by American consumers dropped 0.5 percent in September, the first decline in five months, according to the Commerce Department. Faltering Recovery? New-York based CIT filed for bankruptcy on Nov. 1. CNBC also reported Citigroup Inc. may have a $10 billion writedown of deferred tax assets in the fourth quarter, citing Michael Mayo, an analyst with Calyon Securities USA Inc. “People are starting to have doubts the U.S. recovery will continue,” said Tomochika Kitaoka , chief strategist in Tokyo at Mizuho Financial Group Inc. Stocks in the MSCI Asia Pacific Index are valued at 22 times estimated earnings, compared with 17 times for the S&P 500 and 15 times for Europe’s Dow Jones Stoxx 600. Crude oil for December delivery tumbled the most in a month, dropping 3.6 percent to $77 a barrel, on Oct. 30 in New York. The London Metals Index, a measure of six metals including copper and zinc, dropped 2.8 percent. The yen appreciated to as much as 89.20 per dollar today, the strongest since Oct. 14, compared with 91.02 against the dollar at the close of stock trading in Tokyo on Oct. 30. Against the euro, Japan’s currency strengthened to as high as 131.01 from 135.01. The stronger yen reduces income when overseas revenue is converted into local currency. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net .

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Most Japanese Stocks Gain After Honda Boosts Profit Forecast; Sony Falls

October 27, 2009

By Kana Nishizawa and Toshiro Hasegawa Oct. 28 (Bloomberg) — Most Japanese stocks rose after Honda Motor Co. tripled its profit forecast. Electronics makers declined after U.S. consumer confidence dropped and the yen strengthened. Honda Motor Co., Japan’s second-largest carmaker, jumped 4.8 percent. Sony Corp., the maker of the PlayStation 3 game console, fell 1.3 percent. Canon Inc. , the world’s largest camera maker, dropped 3.1 percent after reporting a seventh- straight quarterly profit decline. “There’s no local reason to be buying Japanese stocks, while the consumer-related companies have started a retreat in the all-important U.S. market, and that’s likely to resonate here as well,” said Hiroichi Nishi , an equities manager at Nikko Cordial Securities Inc. in Tokyo. The Topix Index rose 0.1 percent to 896.21 as of 9:10 a.m. in Tokyo, with about 11 stocks advancing for 10 that declined. The Nikkei 225 Stock Average fell 0.2 percent to 10,196.56. The yen strengthened to as high as 91.61 per dollar, compared with 92.12 at the close of stock trading in Tokyo yesterday. Against the euro, Japan’s currency appreciated to the highest level in a week. The stronger yen reduces income at Japanese companies when overseas revenue is converted into their home currency. In New York yesterday, the Standard & Poor’s 500 Index dropped 0.3 percent. Consumer confidence unexpectedly fell for a second month in October, reinforcing the views of Federal Reserve policy makers who say household spending will be restrained by rising unemployment. To contact the reporter on the story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net ; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net .

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Yen Rises as Drop in Japan Producer Prices, Stocks Spark Demand for Safety

October 13, 2009

By Yoshiaki Nohara and Ron Harui Oct. 14 (Bloomberg) — The yen climbed against the euro and dollar as drops in Japan’s stocks and producer prices boosted demand for the nation’s currency as a refuge. The yen advanced against all 16 of its major counterparts on speculation the Bank of Japan will keep benchmark interest rates unchanged today amid the nation’s fragile economic outlook. The dollar fell to a 14-month low against the euro before a government report forecast to show U.S. retail sales fell last month by the most this year. “The recovery in Japan’s economy is likely to lag that of other countries,” said Tsutomu Soma , a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo. “This may cause risk aversion and buying of the yen.” The yen advanced to 89.26 per dollar at 11:08 a.m. in Tokyo from 89.71 in New York yesterday. The yen rose to 132.87 per euro from 133.26. The greenback fell to $1.4885 per euro from $1.4854, the weakest level since August 2008. The Nikkei 225 Stock Average lost 0.3 percent. The Dollar Index , which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, retreated 0.4 percent to 75.657. Retail sales in the U.S. probably dropped 2.1 percent last month, after rising 2.7 percent in August, according to the median estimate of 78 economists in a Bloomberg News survey. The Fed is scheduled to release minutes of its Federal Open Market Committee’s meeting in September. The statement may expand on policy makers’ assessment of the economy last month, when the central bank reiterated its pledge to keep the benchmark lending rate low “for an extended period.” To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net ; Ron Harui in Singapore at rharui@bloomberg.net .

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Nikon Earnings From Cameras Likely to Beat Forecast, Division Head Says

September 28, 2009

By Mariko Yasu and Maki Shiraki Sept. 28 (Bloomberg) — Nikon Corp., the second-biggest maker of cameras used by professionals, will probably earn more from its photography unit than the company had forecast, led by higher-than-expected exports, an executive said. Sales and profit at Nikon’s imaging operations “will probably be better than our estimate for the first half and the second half,” Makoto Kimura , president of the division, said in an interview on Sept. 25. Stronger demand in China and the accelerating recovery in U.S. and European sales are helping the company, the 61-year-old executive said. Nikon shares have underperformed Japan’s benchmark stock index since Aug. 6, after the Tokyo-based company forecast a record annual loss. Kimura’s comments support estimates by Tokyo-based Camera & Imaging Products Association , which says the digital-camera market’s drop in shipments slowed in the quarter ended June. “Pessimism among camera makers is probably fading,” Osamu Hirose , an analyst at Tokai Tokyo Securities, said by phone today. “Nikon’s volume sales of cameras will probably beat its annual projection, as new models with video functionality are selling well and more products may be introduced in the second half.” Camera Demand Nikon fell 5.4 percent to 1,595 yen as of 12.35 p.m. on the Tokyo Stock Exchange, extending its loss since Aug. 6 to 15 percent. The benchmark Nikkei 225 Stock Average, which dropped 2.6 percent today, has slid 2.5 percent in the same period. Last month, Nikon widened its annual loss forecast to 28 billion yen ($315 million) because of tumbling orders at the semiconductor-equipment business. Profit at the camera division will probably fall 13 percent to 35 billion yen as revenue declines 15 percent, Nikon said at the time. Mid- to high-end models of single-lens-reflex cameras are selling more than the company expected, Kimura said. Prices of point-and-shoot compact cameras are also not falling as much as the company had expected, he said. The value of worldwide shipments of SLR cameras fell 14 percent in the three months ended June 30, after tumbling 53 percent in the preceding quarter, according to CIPA, which tracks data of 14 camera makers including Nikon. Whether the optimism on earnings lasts will largely depend on sales during the quarter ending Dec. 31, when competition will probably intensify, Kimura said. “It’s impossible to tell how much our sales will recover until we actually see how it goes in November and December, the busiest season for us,” he said. To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net .

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Japanese Stocks Advance, Following Gains in U.S.; Toyota, Komatsu Climb

September 9, 2009

By Masaki Kondo Sept. 10 (Bloomberg) — Japanese stocks rose after U.S. shares advanced to an 11-month high, outshining a bigger-than- estimated drop in Japan’s machinery orders. Toyota Motor Corp., which gets almost a third of its revenue in North America, rose 1.1 percent. Komatsu Ltd., the world’s No. 2 maker of earthmoving equipment, advanced 1.5 percent after machinery makers helped lift U.S. shares. “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. “Even a sharp earnings recovery in 2010 has been fully priced into the market, so institutional investors are reluctant to buy and only speculators are active.” The Nikkei 225 Stock Average rose 0.7 percent to 10,385.35 as of 9:02 a.m. in Tokyo. The broader Topix index added 0.8 percent to 946.99, with almost twice as many shares gaining as declining. In New York, the Standard & Poor’s 500 Index climbed 0.8 percent yesterday to the highest level since Oct. 6, with General Electric Co. adding 2.6 percent. Goldman Sachs Group Inc. boosted its investment rating on multi-industry companies to “attractive” from “neutral,” saying they tend to outperform when manufacturing returns to growth. The dollar depreciated against the yen to as much as 91.61 overnight, a level not seen since Feb. 17. Japanese machinery orders dropped 9.3 percent in July from the preceding month, the Cabinet Office said before markets opened. Economists had estimated a 3.5 percent decline in orders, an indicator of capital spending in the next three to six months. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Japanese Stocks Gain on U.S. Unemployment Report; Sony, Nissan Motor Rise

September 6, 2009

By Masaki Kondo and Kotaro Tsunetomi Sept. 7 (Bloomberg) — Japanese stocks rose, rebounding three days of losses, after a government report showed U.S. companies cut fewer jobs than estimated in August. Sony Corp., which gets almost a quarter of its sales from the U.S., and Nissan Motor Co., Japan’s No. 2 automaker, both climbed 1.4 percent. The Nikkei 225 Stock Average rose 0.9 percent to 10,276.41 as of 9:03 a.m. in Tokyo. The broader Topix index added 0.8 percent to 943.07. Both gauges fell for a third day on Sept. 4, the longest stretch of declines in seven weeks. “Investors are focusing on the relative cheapness of equities” since their retreat from the high, said Hiroichi Nishi , an equities manager at Tokyo-based Nikko Cordial Securities Inc. In New York, the Standard & Poor’s 500 Index climbed 1.3 percent in the latest session. A Labor Department report showed U.S. companies cut fewer jobs last month than economists had estimated. The unemployment rate rose to 9.7 percent, the highest level in 26 years. Finance ministers and central bankers from the Group of 20 nations concluded talks in London on Sept. 5. They agreed on plans to rein in bank bonuses and force lenders to hold more capital to avoid a repeat of the global financial crisis. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net ; Kotaro Tsunetomi in Tokyo at ktsunetomi@bloomberg.net .

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Sony’s Walkman Outsells Apple’s IPod for First Time in Four Years in Japan

September 3, 2009

By Pavel Alpeyev and Mariko Yasu Sept. 3 (Bloomberg) — Sony Corp. ’s Walkman digital music player outsold Apple Inc. ’s iPod in Japan last week for the first time in more than four years, according to electronics research firm BCN Inc. The Japanese company’s share of portable music players sold in Japan climbed to 43 percent in the week ended Aug. 30, exceeding Apple’s 42.1 percent, ending the lead that the iPod maker had kept since January 2005, the Tokyo-based researcher said in a statement yesterday. The iPhone also cannibalized iPod sales, according to BCN, which didn’t count the iPhone in the survey because the product is also a wireless handset. Sony, whose Walkman cassette players pioneered the portable-music industry in the late 1970s, gained market share after introducing models including the W series of cordless players that sell for under 10,000 yen ($108). The company in July raised its sales forecast for the devices. “Sony has gained customers seeking less expensive products and those seeking high quality by broadening its lineup,” Kazuharu Miura , an analyst with Daiwa Institute of Research Ltd., said by telephone today. “But you can’t really say Sony regained its competitiveness against Apple unless it improves its market share in the U.S. and Europe.” Sony fell 1 percent to close at 2,430 yen on the Tokyo Stock Exchange, trimming its gain this year to 26 percent. Japan’s benchmark Nikkei 225 Stock Average dropped 0.6 percent. Apple, based in Cupertino, California, closed 0.1 percent lower at $165.18 on the Nasdaq Stock Market yesterday. Japan Market Sony on July 30 lifted its sales forecast for digital music players to 6.7 million units for the year ending March 2010 from its May estimate of 6.3 million. That compares with 7 million sold in the previous year. Sales of portable music players in Japan fell by 13.5 percent in August from a year earlier, a fifth straight month of decline, according to BCN. New products by Sony or Apple are expected to revitalize the stagnant market, the researcher said in the statement. Apple may introduce new iPod models at its “rock and roll” event on Sept. 9, helping the company regain its share, the researcher said. To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net ; Mariko Yasu in Tokyo at myasu@bloomberg.net .

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Most Asian Stocks Fall on U.S. Jobless Report, Stronger Yen; Honda Drops

September 2, 2009

By Shani Raja Sept. 3 (Bloomberg) — Most Asian stocks fell, led by automakers and electronic companies, as U.S. employers cut more jobs than forecast and the yen climbed. Mining companies rose. Honda Motor Co., which gets 45 percent of its revenue in North America, dropped 2.6 percent in Tokyo. Sony Corp., which makes three quarters of its sales abroad, lost 1.6 percent as the yen rose to a seven-week high versus the dollar. Newcrest Mining Ltd., Australia’s largest gold miner, climbed 6.2 percent after gold climbed the most in more than five months. More than two stocks declined for each one that advanced on the MSCI Asia Pacific Index , which dropped 0.3 percent to 112.10 as of 9:58 a.m. in Tokyo. The gauge has climbed 59 percent from a more than five-year low on March 9 on speculation the global economy is recovering. “The economic data has caught up to where the market was,” said Stephen Halmarick , Sydney-based head of investment- markets research at the firm, which holds about $115 billion. “For the equity market to really move on again, you need the next stage to take place, which is a more sustained recovery and better profitability.” Japan’s Nikkei 225 Stock Average fell 0.8 percent, while Australia’s S&P/ASX 200 Index sank 0.4 percent. South Korea’s Kospi Index lost 0.3 percent. ‘Considerable Uncertainty’ Futures on the Standard & Poor’s 500 Index dropped 0.2 percent. The gauge lost 0.3 percent as a survey by ADP Employer Services showed businesses reduced payrolls by 298,000 in August, while economists had forecast a drop of 250,000. The Federal Reserve expressed “considerable uncertainty” about the strength of the economic recovery, minutes of its August meeting showed. Honda sank 2.6 percent to 2,835 yen as the stronger yen threatens the value of sales generated overseas. The yen appreciated to as much as 91.95 per dollar, a level not seen since July 13. Japan’s currency also gained to a seven-week high versus the euro. Toyota Motor Corp., the world’s largest automaker, lost 1.5 percent to 3,860 yen. Sony dropped 1.6 percent to 2,415 yen. “Investors are turning cautious as employment concerns have flared up again, while the stronger yen is going to be tough on the exporters,” said Mitsushige Akino , who oversees the equivalent of $637 million at Tokyo-based Ichiyoshi Investment Management Co. “The market is likely to stay in a tight range today. It’s going to be very hard for stocks to start pushing to new highs.” The MSCI Asia Pacific Index’s rally since March has boosted the average price of stocks in the gauge to 23 times estimated earnings, compared with 16.5 times for the S&P 500, data compiled by Bloomberg show. A weaker dollar spurred demand for gold as an alternative investment, sending the precious metal’s futures up by 2.3 percent in New York. The gain was the biggest since March 19. Newcrest climbed 6.2 percent to A$31.42. Lihir Gold Ltd., Australia’s second-biggest gold mining company, jumped 6.8 percent to A$2.97. To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net .

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Asian Stocks Fall as Seven & I Cuts Profit Forecast, Commodity Prices Drop

September 1, 2009

By Jonathan Burgos Sept. 2 (Bloomberg) — Asian stocks fell, led by consumer and mining companies, as Seven & I Holdings Co. cut its profit forecast and commodity prices declined. Seven & I, Japan’s largest retailer, dropped 3.6 percent in Tokyo. BHP Billiton Ltd., the world’s largest mining company, lost 2 percent in Sydney. Mitsubishi UFJ Financial Group Inc., Japan’s largest publicly traded bank, slipped 2.7 percent as concern lenders will report more losses dragged U.S. financial shares lower yesterday. 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 MSCI Asia Pacific Index dropped 1.6 percent to 112.19 as of 9:57 a.m. in Tokyo. The gauge has risen 59 percent from a more than five-year low on March 9 on speculation the global economy is recovering. That’s taken the average price of stocks on the index to 1.5 times book value, close to an 11-month high. Japan’s Nikkei 225 Stock Average declined 2.8 percent to 10,239.66. Australia’s S&P/ASX 200 Index slipped 1.7 percent. New Zealand’s NZX 50 Index lost 1 percent. South Korea’s Kospi Index fell 1.5 percent. Futures on the S&P 500 Index were little changed. The gauge slid 2.2 percent yesterday, the most since Aug. 17. The KBW Bank Index of 24 U.S. financial companies fell 5.8 percent as analysts at RBC Capital Markets said U.S. banks on the West Coast still face credit deterioration and higher loan losses. Banks Decline Mitsubishi UFJ dropped 2.7 percent to 579 yen. Westpac Banking Corp., Australia’s largest bank by market value, sank 2.7 percent to A$24.17. Seven & I declined 3.6 percent to 2,150 yen. The company cut its full-year net income target by 11 percent yesterday. “There are signs of recovery in certain sectors of the domestic economy, but an overall recovery seems unlikely,” the company said in a filing with the Tokyo stock exchange. “Consumer sentiment remains weak.” BHP Billiton lost 2 percent to A$36.53. Rio Tinto Group Ltd., the world’s third largest mining company, fell 2.2 percent to A$56.09. Inpex Corp., Japan’s largest oil explorer, slumped 4.1 percent to 732,000 yen. 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: Jonathan Burgos in Singapore at jburgos4@bloomberg.net .

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Asian Stocks Fall as Seven & I Cuts Profit Forecast, Commodity Prices Drop

September 1, 2009

By Jonathan Burgos Sept. 2 (Bloomberg) — Asian stocks fell, led by consumer and mining companies, as Seven & I Holdings Co. cut its profit forecast and commodity prices declined. Seven & I, Japan’s largest retailer, dropped 3.6 percent in Tokyo. BHP Billiton Ltd., the world’s largest mining company, lost 2 percent in Sydney. Mitsubishi UFJ Financial Group Inc., Japan’s largest publicly traded bank, slipped 2.7 percent as concern lenders will report more losses dragged U.S. financial shares lower yesterday. 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 MSCI Asia Pacific Index dropped 1.6 percent to 112.19 as of 9:57 a.m. in Tokyo. The gauge has risen 59 percent from a more than five-year low on March 9 on speculation the global economy is recovering. That’s taken the average price of stocks on the index to 1.5 times book value, close to an 11-month high. Japan’s Nikkei 225 Stock Average declined 2.8 percent to 10,239.66. Australia’s S&P/ASX 200 Index slipped 1.7 percent. New Zealand’s NZX 50 Index lost 1 percent. South Korea’s Kospi Index fell 1.5 percent. Futures on the S&P 500 Index were little changed. The gauge slid 2.2 percent yesterday, the most since Aug. 17. The KBW Bank Index of 24 U.S. financial companies fell 5.8 percent as analysts at RBC Capital Markets said U.S. banks on the West Coast still face credit deterioration and higher loan losses. Banks Decline Mitsubishi UFJ dropped 2.7 percent to 579 yen. Westpac Banking Corp., Australia’s largest bank by market value, sank 2.7 percent to A$24.17. Seven & I declined 3.6 percent to 2,150 yen. The company cut its full-year net income target by 11 percent yesterday. “There are signs of recovery in certain sectors of the domestic economy, but an overall recovery seems unlikely,” the company said in a filing with the Tokyo stock exchange. “Consumer sentiment remains weak.” BHP Billiton lost 2 percent to A$36.53. Rio Tinto Group Ltd., the world’s third largest mining company, fell 2.2 percent to A$56.09. Inpex Corp., Japan’s largest oil explorer, slumped 4.1 percent to 732,000 yen. 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: Jonathan Burgos in Singapore at jburgos4@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 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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