Nikkei in Tokyo Drops 1.2%; BoJ May Expand Bond Program

Nigel Thomas
26 Apr, 2011
New York City

Stocks in Japan continued to drift lower ahead of earnings, a week long holiday and central bank rate decision this week. The Bank of Japan is expected to expand its 3 trillion yen bond program to support the rebuilding effort. Automakers declined and shipping lines closed lower a day after surging.

[R]4:30 PM Tokyo – Stocks in Japan continued to drift lower ahead of earnings, a week long holiday and central bank rate decision this week. The Bank of Japan is expected to expand its 3 trillion yen bond program to support the rebuilding effort. Automakers declined and shipping lines closed lower a day after surging.[/R]

Stocks in Tokyo trading closed lower ahead of earnings and general apathy of traders ahead of the Golden Week holidays. The yen advanced in thin trading as commodities gained.

Gold and silver hit a new high after a rally of eight days and silver inched towards $50 price level and gold traded as high as $1,509 an ounce in New York trading.

The Nikkei 225 Stock Average decreased 1.2% or 113.27 to 9.558.69 and the broader Topix index fell 0.8% to 833.64.

Trading volume reached a new low of 1.54 billion shares on the main board of the Tokyo Stock Exchange and below the 2.1 billion shares average last two weeks.

The yen traded in a narrow range between 81.95 and 82.15 yen to a dollar.

Japanese bonds closed higher after the latest auction of 2-year notes for 2.6 trillion yen or $32 billion drew stronger than expected demand. At close, the yield on the 1.3% bond due March 2021 edged down 1 point to 1.215%.

Bank of Japan Governor Masaaki Shirakawa in a interview suggested that he may expand a 3-trillion yen lending program to provide a support to the government’s rebuilding program after the recent triple disaster on March 11.

The Bank of Japan is expected to keep interest rate between zero and 0.1% after its meeting scheduled on April 28.

Stock Movers

Exporters were weak after the yen gained in thin trading. Electronics makers and automakers closed lower.

Sony Corp declined 2.1% to 2,415 yen and Toshiba Corp dropped 2.8% to 416 yen.

DeNA Co soared 5.6% to 2,988 yen after the company announced an agreement with NTT DoCoMo Inc to provide a direct link to its mobile service customers.

NTT DoCoMo increased 0.7% to 144,600 yen. Other social game maker Gree Inc increased 3.1% to 1,555 yen.

Canon Inc declined 30 yen or 0.9% to 3,495 yen and after the close it reported operating profit declined 5% and lowered its annual out look in the current year.

Daiwa Securities Group declined 6 yen or 1.6% to 360 yen after the second largest brokerage firm reported a loss of 33.1 billion yen compared to a loss of 2.8 billion a year ago.

Tokyo Electric Power Company, Inc declined 2.8% or 12 yen to 426 yen.

Toyota Motor Corp increased 2.5% or 80 yen to 3,195 yen and Nissan Motor soared 0.3% or 2 yen to 761 yen. Honda Motor Corp fell 1.6% to 3,055 yen.

Mitsui OSK Lines, Ltd declined 1.8% to 453 yen and Kawasaki Kisen Kaisha declined 1.1% to 275 yen and INUI Steamship Co. Ltd declined 2.5% to 438 yen.