5-Day Drop in Nikkei; Yen Rise Worries

Chandrasekhar Atreya
22 Jul, 2010
New York City

Stocks in Japan fell for the fifth day in a row hurt by a stronger yen. Policy makers express concern about the recent rise in yen. Elpida Memory and Spansion Inc renew a five year agreement. Finnowave Investments aims to quadruple assets in its hedge fund.

[R]5:00 PM Tokyo, Japan – Stocks in Japan fell for the fifth day in a row hurt by a stronger yen. Policy makers express concern about the recent rise in yen. Elpida Memory and Spansion Inc renew a five year agreement. Finnowave Investments aims to quadruple assets in its hedge fund.[/R]

Japanese stocks fell for the fifth straight day after the Federal Reserve Chairman Ben. S. Bernanke said the U.S. economic outlook stays “unusually uncertain.” The Topix Index dropped to its lowest level since November.

The Nikkei 225 Stock Average declined 0.62% or 57.95 to close at 9,220.88 in Tokyo. The broader Topix declined 0.5% to close at 825.48, the lowest since November 27.

Policy makers in Japan expressed their concern that a continuously rising yen will undermine exporters, the main source of the nation’s income and economic recovery.

“We want to avoid excessive gains in the yen in light of economic growth strategy released by the government last month,” said Vice Finance Minister Motohisa Ikeda while speaking to reporters in Tokyo today. He was speaking a day after Trade Minister Masayuki Naroshima said the currency’s gains pose a risk the nation’s economic expansion.

Elpida Memory Inc, the nation’s biggest chipmaker, said it will manufacture NAND flash memory for Spansion Inc, at its Hiroshima plant after extending an existing partnership agreement, the two companies said in a statement today.

Tokyo-based Finnowave Investments, that runs a hedge fund, said it aims to quadruple its assets to 100 billion yen in about two years, making it easier for the company to lure pension money.

Finnoave had obtained the discretionary investment manager license from Japan’s Financial Services Agency in June. Assets under management currently stand at about 25 billion yen across three funds run by the company, said the company’s President Hideki Wakabayashi in an interview on July 20 in Tokyo.

“Japanese pension fund’s attitude towards alternate investments is starting to change as they realize the need to diversify their long-only investments,” Wakabayashi said in the interview.

Fox Networks Group is seeking a license from the government for a second channel to offer digital satellite broadcasting service as analog services will end July 2011.

About six channels are expected to be approved by the Communications Ministry later this year to use the analog bandwidth now used for broadcast of satellite services, Nikkei English News reported citing an interview with Fox Networks CEO, Tony Vinciquerra.

Gainers and Losers

Shinogi & Co led the gainers in the Nikkei 225 Stock Average with a gain of 3.83% to 1,790 yen followed by Mitsui & Co 2.3% to 1,113 yen, NGK Insulators 2.19% to 1,351 yen, and Sony Corp 2.17% to 2,398 yen.

Minebea Co Ltd led the decliners in the Nikkei with a fall of 4.46% to 450 yen, followed by Oki Electric Co 4.35% to 66 yen, Nippon Light Metal 3.42% to 113 yen, Sumitomo Metal 3.38% to 200 yen.