apanese stocks rose, with the Nikkei 225 Stock Average paring its biggest monthly loss since August, as shipping companies and steelmakers rebounded.
Kawasaki Kisen Kaisha Ltd. (9107) and other shipping lines advanced, rising for a third day after the sector plunged by as much as 25 percent this month. JFE Holdings Inc. (5411) and Kobe Steel Ltd. (5406) both rebounded for a third day. Nikon Corp., a camera maker that depends on Europe for about a quarter of its sales, gained 1.5 percent on optimism the leaders in the region will boost efforts to end the debt crisis.
“Investors are likely to buy shares even on small news because stocks (TPX) have been sold too much globally on lingering debt issues in European countries,” said Seiichiro Iwamoto, who helps oversee about $35 billion in Tokyo at Mizuho Asset Management Co. “People in the market are swinging between joy and sorrow on even the smallest news from the region.”
The Nikkei 225 (NKY) gained 1.1 percent to 8,377.74 as of 12:36 a.m. in Tokyo. For the month, the gauge has lost 6.8 percent amid signs Europe’s crisis is spreading to the region’s major economies. The broader Topix gained 0.8 percent to 721.72 today.
The Standard & Poor’s 500 Index (SPXL1) gained 2.9 percent yesterday in New York after Thanksgiving retail sales climbed to a record amid speculation European leaders will do more to tame the debt crisis. U.S. retail sales during the holiday weekend increased 16 percent to $52.4 billion, the National Retail Federation said on Nov. 27, citing a BIGresearch survey.
Shippers, Steelmakers
Shipping lines and steelmakers gained the most among the 33 Topix industries groups today, rebounding after the sectors plunged by at least 35 percent this year.
Kawasaki Kisen, which sank by more than 60 percent this year, gained 4.6 percent to 136 yen. Shares gained even after the Nikkei newspaper reported the shipping line will likely post a net loss of 32 billion yen ($409 million) this fiscal year on sluggish demand from the U.S. and Europe.
Mitsui O.S.K. Lines Ltd., the nation’s No. 2 shipping line by revenue, rose 2.9 percent to 247 yen. The shares have fallen by about half this year.
JFE Holdings advanced 4.2 percent to 1,381 yen. Kobe Steel climbed 1.8 percent to 116 yen. The companies have dropped more than 40 percent this year.
Japanese stocks gained even after the jobless rate rose for the first time in three months, adding to evidence that the nation’s post-earthquake rebound is fading. The unemployment rate increased to 4.5 percent in October.
Exporters to Europe
Japanese exporters to Europe advanced today. Nikon gained 1.5 percent to 1,770 yen. Ricoh Co., a maker of cameras and office-equipment that depends on the region for more than 20 percent of its sales, rose 2 percent to 680 yen.
In Europe, German newspaper Welt am Sonntag reported German Chancellor Angela Merkel and French President Nicolas Sarkozy are discussing an agreement under which member states will commit to tighter budget discipline without waiting for treaty changes. The newspaper did not say where it got the information.
“There are increasing expectations that some additional support for the European debt crisis will come out at the European summit meeting next month,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “The expectations won’t last long and the markets will likely react nervously to European news.” (Bloomberg)
Japanese stocks fell after Standard & Poor’s cut Spain’s credit rating, fueling concern that a deterioration of Europe’s debt crisis will weigh on Asian economies and corporate earnings.
Nissan Motor Co., a carmaker that gets about 15 percent of its revenue from Europe, dropped 2.5 percent. Canon Inc. slipped 2.7 percent after the camera maker said it’s preparing to move production from two factories affected by flooding in Thailand. Olympus Corp. plunged 15 percent after the optical equipment maker’s board ousted Michael Woodford as president.
“The market has taken positively the idea of recapitalizing Europe’s banks and stocks have rebounded for the past week,” said Kazuyuki Terao, chief investment officer of RCM Japan Co. “Taking concrete action isn’t going to be easy because Germany and France are divided on the issue. Until markets get that, share prices are not going to rise.”
The Nikkei 225 (NKY) Stock Average fell 0.9 percent to 8,748.47 as 12:38 p.m. in Tokyo, trimming its weekly advance to 1.7 percent. The broader Topix dropped 1.1 percent to 750.54, with more than five shares falling for each that advanced.
The Topix tumbled 16 percent this year through yesterday amid concern the U.S. would fall into another recession while Europe’s debt crisis threatens to spread to the banking system. The slide has cut the price of shares on the index to 0.88 times estimated book value, near the lowest since March 2009. (Bloomberg)
Japanese stocks fell amid signs of growing instability in the global financial system after the Federal Reserve said there are “significant downside risks” to the U.S. growth outlook and Europe’s risk watchdog said threats to the region’s banks have increased “considerably.”
Mitsubishi UFJ Financial Group Inc. (8306) led declines among Japan’s biggest lenders on growing international turmoil and after BNP Paribas SA said the country’s banking industry is “deteriorating.” Honda Motor Co., Japan’s second-largest carmaker, slid 4.6 percent. Softbank Corp. (9984) plunged 11 percent after a report the carrier will lose its position as the exclusive provider of Apple Inc.’s iPhone in Japan.
The Nikkei 225 (NKY) Stock Average lost 2.2 percent to 8,552.02 at 12:38 p.m. in Tokyo after investors were disappointed by a Fed plan to support growth in the world’s biggest economy by buying $400 billion of longer-term debt. The broader Topix index dropped 2 percent to 741.77, heading for the biggest drop since Aug. 19. Japan’s stock market will be closed tomorrow for a public holiday.
“The market had priced in the Fed’s plan,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s third-largest bank by market value. “It won’t boost the economy much, while it may have a negative impact on earnings of financial institutions.”
‘No Surprises’
The Standard & Poor’s 500 Index slid 2.9 percent yesterday in New York, the biggest drop since Aug. 18, after the Fed announced a widely anticipated policy that investors dubbed “Operation Twist” because it’s designed to flatten the yield- curve to stimulate borrowing and investment. Financial shares plunged after Moody’s Investors Service cut its credit ratings for three major U.S. banks. Futures on the S&P 500 slipped 0.7 percent today.
“The Fed delivered no surprises, leaving markets facing sovereign-debt issues in Europe to which there is still no clear solution,” said Angus Gluskie, who manages more than $300 million at White Funds Management in Sydney. “Under the surface, we are moving quickly into a secondary credit crisis.”
The Topix has lost about 18 percent this year amid concern U.S. growth is sputtering and Europe’s debt crisis will damage the banking system, damping demand in two of Japan’s biggest export markets. The decline has cut the price of shares on the index to 0.89 times estimated book value, near the lowest since March 2009.
Risks Increase
The European Systemic Risk Board urged swift action from policy makers to tackle threats to the financial system that have increased “considerably” as the region’s sovereign debt crisis pressures banks.
“Key risks stem from potential further adverse feedback effects between sovereign risks, funding vulnerabilities within the European Union banking sector, and a weakening of growth outlooks both at global and EU levels,” the ESRB, Europe’s risk watchdog, said in a statement late yesterday. “Decisive and swift action is required from all authorities.”
Japanese lenders tumbled today after BNP Paribas initiated coverage on seven of the country’s largest banks, saying they have little chance of improving profitability.
Mitsubishi UFJ, the country’s biggest listed bank, declined 2.4 percent to 329 yen. Mizuho Financial Group Inc. (8411) slipped 1.8 percent to 112 yen, while Sumitomo Mitsui Financial Group Inc. (8316) dropped 2.4 percent to 2,076 yen.
‘Allowed to Fail’
Banking shares also fell in Tokyo today after Moody’s cut credit ratings for Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. The ratings service said “there is an increased possibility that the government might allow a large financial institution to fail, taking the view that contagion could be limited.”
Indexes tracking makers of cars and electronics contributed the most to declines on the Topix. Honda dropped 4.6 percent to 2,259 yen. Toyota Motor Corp. (7203), the world’s biggest automaker, fell 2.1 percent. Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, slid 2.3 percent to 1,477 yen.
Softbank, Japan’s sole carrier of the iPhone, slumped 11 percent to 2,323 yen, falling the most on the Nikkei, after the Nikkei Business magazine reported that KDDI Corp. (9433) will begin selling the newest model of the smartphone in the domestic market. KDDI gained 1.3 percent to 637,000 yen. (Bloomberg)
Japanese stocks fell for a second day, with the Nikkei 225 (NKY) Stock Average headed for its lowest close in almost two and a half years, as exporters and banks tumbled amid speculation Greece may be nearing default.
Sony Corp. (6758), an exporter of consumer electronics that gets 21 percent of its sales in Europe, fell 2.6 percent as the yen’s advance to a 10-year high against the euro dimmed the earnings outlook. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s biggest lender by market value, declined 2.4 percent on concern Europe’s debt crisis will hurt the global financial system. Sharp Corp. plunged 4.7 percent after Mizuho Securities Co. cut its target price on the maker of flat-screen panels.
The Nikkei 225 fell 1.9 percent to 8,569.66 as of 12:36 p.m. in Tokyo, headed for its lowest close since April 2009. The broader Topix slid 1.8 percent to 741.88 as speculation Germany is preparing for a Greek default spurred turmoil in financial markets worldwide.
“Rising default risks in Greece are stoking concerns about the financial system, which makes you think about the Lehman shock,” said Mitsuo Shimizu, an analyst at Cosmo Securities Co. in Tokyo.
Futures on the Standard & Poor’s 500 Index dropped 0.8 percent today. The index fell 2.7 percent on Sept. 9 in New York after three German officials said Chancellor Angela Merkel’s government is making plans to shore up banks if Greece defaults. The European Central Bank said Juergen Stark resigned from the executive board, suggesting policy makers are divided over how to fight the debt crisis. (Bloomberg)
Japanese stocks advanced for the first time in three days after the government sold yen, boosting prospects for exporters earnings.
The Nikkei 225 Stock Average gained 1 percent to 9,733.10 as of 12:42 p.m. in Tokyo, after falling as much as 0.2 percent. The broader Topix index climbed 0.9 percent to 833.88. The gains were maintained on optimism the yen may weaken further should the Bank of Japan follow its Swiss counterpart and take further measures.
The stock market is reacting to the yen’s depreciation, the yen may continue to weaken “if the Bank of Japan also takes some easing measures along with other countries.
Japan’s central bank may follow the unilateral action to sell the yen with monetary stimulus.
The yen dropped against all 16 of its major counterparts, falling to 79.15 against the dollar, the lowest level since July 20, compared with 77.15 at the close of stock trading in Tokyo yesterday. Against the euro, the yen slipped to 113.09 from 109.65. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.
Exporters advanced on easing concerns the yen, which had approached a postwar high against the dollar, will hurt overseas earnings. Canon rallied 2.3 percent to 3,775 yen. Ricoh Co., an office-equipment maker which derives more than half of its revenue outside Japan, climbed 2.2 percent to 807 yen. Toyota Motor Corp. (7203), the world’s largest carmaker, advanced 2.2 percent to 3,190 yen.
Swiss Action
Switzerland, also contending with a stronger currency, unexpectedly cut interest rates and pledged to boost the supply of the franc yesterday.
In the U.S., the Standard & Poor’s 500 Index advanced 0.5 percent to 1,260.34 yesterday, snapping a seven-day decline, amid speculation the Federal Reserve may consider another economic stimulus program to prevent a recession.
The Wall Street Journal reported three former top officials at the Fed said the central bank should consider a new round of securities purchases to bolster economic growth. (Bloomberg)
Yen Plunges
The BOJ will likely expand an asset-purchase program that was first set up last year and aimed to counter Japan’s trenchant deflation.
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