Japan Bond Yields Rise; Fast Retailing Plunges

Mayank Mehta
05 Apr, 2010
New York City

Stocks in Tokyo traded higher after U.S. employment in March increased. Steelmakers, electronics exporters and automakers led the gainers. Japanese bond yields rose tracking the gains in the U.S. Treasuries. Fast Retailing dropped 11% after March same store sales plunged 16.4%.

[R]5:00 AM Tokyo, Japan – Stocks in Tokyo traded higher after U.S. employment in March increased. Steelmakers, electronics exporters and automakers led the gainers. Japanese bond yields rose tracking the gains in the U.S. Treasuries. Fast Retailing dropped 11% after March same store sales plunged 16.4%.[/R]

Japanese stocks are expected to trade higher ahead of bond auction today and the optimistic view of corporate earnings.

U.S. Transportation Secretary Ray LaHood proposed the highest civil penalty of $16.4 million against Toyota Motor Corp for “knowingly” hiding dangerous defect that caused sudden acceleration. Toyota has two weeks to contest the fine.

The Nikkei 225 Index in Tokyo closed higher 154.46 or 1.39% to 11,244.40 and of the stocks in Nikkei 225 Stock Average, 164 increased, 45 declined and 16 was unchanged.

Ten-year Japanese bond yields increased 2.5% to 1.38% according to Japan Bond Trading Co. The yields are expected to rise in the coming months on the expectations of the rising yields on the U.S. Treasury bonds.

The Japanese bond yields premium to the U.S. Treasury bonds increased to 2.58 percentage points and is expected to increase to beyond 3.00 percentage points in the next three months.

The yen declined to as low as 94.7954 against a dollar, the weakest level since August 24.

Nikkei Movers

Fast Retailing Co Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 10.6% followed by losses in Softbank Corp of 3.8%, in Sky Perfect JSAT Holdings Inc of 3.2%, in JX Holdings Inc 2.1% and in Tokyo Gas Co Ltd 1.7%.

Nitto Boseki Co Ltd led gainers in the Nikkei 225 Stock Average with a rise of 7.9% followed by gains in Clarion Co Ltd 7.9%, in Okuma Corp of 7.5% and in Kobe Steel, Ltd 6.3%.

Other Movers

Canon Inc advanced 2.5% to 4,510.00 yen after the yen declined to its lowest level in ten-months.

Fast Retailing dropped 11% to 14,920 yen after same store sales in March declined 16.4% from a year ago.

Kobe Steel, Ltd climbed 6.8% to 218.00 yen after the steelmaker rating was lifted by a broker. The steelmakers gained after the U.S. employment in March increased raising the prospects of higher sales.

Mazda Motor Corporation added 3.2% to 283.00 yen and Honda Motor Co increase 1.4% to 3,380 yen after the yen declined to 10-month low.

Panasonic Corporation the maker of plasma televisions rose 2.8% to 1,480.00 yen and Sharp Corporation the maker of liquid-crystal displays gained 3.3% to 1,249.00 yen.

Sanrio Company, Ltd the gift maker surged 13.6% to 1,009.00 yen after the company said it won an approval to build a manufacturing plant in Vietnam that may cost $1 billion.

Shin-Etsu Chemical Co., Ltd increased 3.8% to 5,700.00 yen after the company will spend 100 billion yen ($1.06 billion) to build a plant in the United States to boost production of input material for vinyl chloride resin, the Nikkei business daily reported on Sunday.