Nikkei Falls As Germany Restricts Shorts

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
19 May, 2010
New York City

Markets in Japan and Asia closed lower on the ongoing worries related to euro-zone. Six biggest banks in Japan total net profits soar to 1.13 trillion yen in 2009. Toyota recalls six Lexus models.

[R]5:00 AM New York, 7:00 PM Tokyo – Markets in Japan and Asia closed lower on the ongoing worries related to euro-zone. Six biggest banks in Japan total net profits soar to 1.13 trillion yen in 2009. Toyota recalls six Lexus models.[/R]

Stocks fell in Japan, sending the Topix index to its longest losing phase in three months after German financial regulator BaFin restricted naked short sales to help ease the euro-zone debt crisis.

The ban is expected to run until the end of March next year and will cover naked credit default swaps involving euro-zone debt.

Investors fear that the debt crisis in Europe might be deepening.

The Japanese government must unveil a decisive fiscal plan next month to keep the current stable rating given by Moody’s Investor Services, said the agency’s Senior Vice President Thomas Byrne in Tokyo today. The rating given currently is Aa2, the third highest ranking.

Finance Minister Naoto Kan and National Strategy Minister Yoshito Sengoku have said the country needs to learn from Greece’s debt crisis as Japan’s borrowings approach 200% of GDP.

T&D Asset Management Co will be starting its first long-short hedge fund that aims to profit from shorting strategies in Japanese stocks to tap the domestic demand for such alternate strategies.

The T&D Japanese Equity Long & Short fund, nicknamed ‘Meigen’, will start with about 700 million yen from T&D Asset, the asset management arm of the Japanese insurer T&D Holdings Inc, on June 1. The fund with a maximum asset limit of 50 billion yen aims to raise its assets to 10 billion yen in two years. The fund is expected to have 50 to 70 short positions and 40 to 60 long positions.

As annual or semi-annual medical checkups become mandatory in the US as they are in Japan, Sysmex Corp, Japan’s largest maker of blood testers, expects to double its sales in the US in three years, said the company’s CEO Hisashi Ietsugu in an interview with Bloomberg News in Tokyo yesterday.

The US Preventive Services Task Force recommends regular examinations for colorectal cancer, HIV, syphilis, breast cancer, cervical cancer, gonorrhea and osteoporosis along with a few other tests as part of the health-care reforms.

Sysmex Corp will benefit as blood tests are the gateway to understanding the human body and our business will grow, said Ietsugu.

In Tokyo trading Nikkei 225 Stock Average fell 0.5% or 55.8 to 10,186.84, and the broader Topix Index dropped 0.4% to 910.64.

In the first section of the Tokyo Stock Exchange 24.5 billion shares worth 1.6 trillion yen were traded and in the second section 454 million shares valued at 4.9 billion yen changed hands.

Of the Nikkei 225 index stocks, 65 rose, 148 fell, and 12 were unchanged. Nippon Light Metals led gainers in the index shares with a rise of 4.7%.

Mobile Phone Ads Rise 22% in 2009

Nikkei News reported today the Seed Planning Inc research said the market for ads placed on Web sites for mobile phone rose 22.2% to 121 billion yen in 2009 driven by companies offering fee-based content.

Ads placed by online shopping mall operators also contributed to the gain.

Banks Profit Soars to 1.13 Trillion Yen

Japan Today said today profits at the country’s six largest banks- Mitsubishi UFJ Financial Group, Mizuho Financial Holdings, Sumitomo Mitsui Financial Group, Resona Holdings and Chuo Mitsui Trust- rose to 1.13 trillion yen in fiscal 2009 from a combined loss of 1.17 trillion yen a year ago.

The increase was due to the drop in bad-loan disposal costs and a pickup in economic activity.

Toyota to Recall Four Models

Nikkei News reported today that Toyota Motor Corp will recall four of its Lexus luxury brands covering 11,500 units in Japan and Elsewhere.

The four models include LS460 and LS460L, and hybrid models LS600h and LS600hL.

The report notes that the problem occurs because of a change made to the computerized steering system.

Japan’s Transport Ministry has received 12 complaints related to the problem.

Nikkei 225 Stock Average Movers

Nippon Light Metals led advancers in the Nikkei 225 index stocks with a rise of 4.7% followed by Isuzu Motors 4.5%, Denki Kagaku 4.1%, Mitsui Mining & Smelting 3.5%, and GS Yuasa Corp. 3.5%.

Hitachi Zosen led decliners in the Nikkei 225 index stocks with a fall of 4% followed by Matsui Securities 3.4%, Nippon Sheet Glass 3.2%, Nippon Express 3.1%, and NTT Data Corp. 2.9%.

Other Movers

Nintendo Co rose 3.5% to 26,850 after the stock decreased 6.7% over the last three trading sessions.

Financial stocks fell on fears of a deepening debt crisis in Europe. Mizuho Trust & Banking plunged 1.2% to 80 yen.

Shipping lines dropped on fears of drop in demand after measures to cut debt in Europe. Mitsui OSK Lines plunged 1.1% to 624 yen.