Stocks Struggle with 15-Year High Yen

Chandrasekhar Atreya
13 Aug, 2010
New York City

The steep rise in the yen continues to garner attention from stock investors and central bank policy makers. The yen is hovering near the fifteen year high against the dollar as Japanese corporation bring back earner profits from the U.S. Electricity generation in July climbs.

[R]5:00 PM Tokyo, Japan – The steep rise in the yen continues to garner attention from stock investors and central bank policy makers. The yen is hovering near the fifteen year high against the dollar as Japanese corporation bring back earner profits from the U.S. Electricity generation in July climbs. Consumer confidence falls for the first time in seven months.][/R]

The benchmark index in Japan traded lower in the morning and recouped some of the losses in the afternoon session after the yen paused from its recent rise.

But the upward momentum in stocks was stifled by lack of investors on Bon holiday this week and ahead of release of U.S. retail sales and CPI data for July.

The Nikkei 225 Stock Average closed up 0.44% or 40.87 to 9,253.46. The broader Topix Index also gained 0.4% to close at 831.24 with about two stocks gaining for each one that dropped.

Of the 225 stocks in the Nikkei index 142 gained, 66 dropped and 17 stayed unchanged.

According to the minutes of the July meeting of the Bank of Japan board members released today, steep rise in the yen is a concern among the policy makers. The dollar fell Wednesday to a 15-year low to 84.72 yen.

“With regard to the recent appreciation of the yen, and the fall in Japanese stock prices, some members said that the effect on the economy should be examined closely,” the minutes of the BOJ’s July 14-15 meeting showed.

Electricity generated by the ten regional power utilities in July rose 7.9% from a year earlier to 90.72 billion kilowatt hours as the prevailing hot weather increased the demand for power, the Federation of Electric Power Companies said today.

Consumer confidence dipped for the first time in seven months in July, according to data released by the Cabinet Office on Thursday. The consumer confidence index, a gauge of future consumer spending, came to 43.3 from 43.5 in the month of June.

The sub-index of willingness to buy durable goods dipped 0.5%, while the sub-indexes for overall livelihood and income growth sagged 0.4% and 0.1% respectively for their first downturns in seven months. The survey was conducted on July 15. The sub-index for employment gained for the seventh straight month with an up-tick of 0.4%.

The big three Japanese automakers continued to pay high levels of sales incentives to U.S. dealers in July, according to a research firm. The average sales rebate by Toyota Motor Corp, Honda Motor Co and Nissan Motor Co stood at $2,463 per vehicle in July rising from $2,439 in June, making it the third straight month of increase. The July incentives took a step closer to the record $2,542 in March.

Gainers & Losers

Fuji Heavy Industries led the gainers in the Nikkei with a rally of 5.71% to 481 yen followed by Sumco Corp 4.67% to 1,547 yen and UNY Co Ltd 3.08% to 669 yen.

CSK Holdings Corp led the decliners in the index with a drop of 7.32% to 304 yen followed by T&D Holding Inc 2.93% to 1,725 yen and Mizuho Trust 2.7% to 72 yen.