Yen Drops 4% on Japanese Intervention; Ebara, Mitsui OSK Fall

Nigel Thomas
31 Oct, 2011
New York City

Finance ministry in Japan intervened in the currency market and propped up the yen by 4%. The yen had traded near its 25-year high. Stocks declined and investors surmised the intervention will not sustain the weaker yen. Ebara Corp plunged 11% and Mitsui OSK dropped 4% on weak earnings outlooks.

[R]6:00 PM Tokyo – Finance ministry in Japan intervened in the currency market and propped up the yen by 4%. The yen had traded near its 25-year high. Stocks declined and investors surmised the intervention will not sustain the weaker yen. Ebara Corp plunged 11% and Mitsui OSK dropped 4% on weak earnings outlooks.[/R]

Japan intervened in the currency market to weaken the yen. Finance ministry carried out a repeated market intervention that dragged the yen against the dollar and the euro in a move that was similar to last action on August 4.

The yen declined 4% to 79.01 against one dollar and traded as low as 75.35 before the market intervention in the morning today.

Finance Minister Jun Azumi in noted the aggressive stance in the market today and added, “I have repeatedly said that we will take bold action against speculative moves in the market. I will continue to intervene until I am satisfied.”

The yen declined today and estimated at least 450 billion yen were sold today. The intervention is expected to last few more days but most analysts expect the currency to bounce back near its recent highs.

The Nikkei 225 Stock Average fell 62.08 or 0.7% to 8,988.39 and the broader Topix index fell 7.36 or 1% to 764.06. For the month the Nikkei increased 0.4% and the Topix gained 3.7%.

In trading on the First Section of the Tokyo Stock Exchange, 1.78 billion shares changed hands worth 1.18 billion yen worth of shares, up from 2.2 billion shares trading on Friday. Of the shares traded, 956 declined and 560 rose.

Stock Movers

Softbank Corp fell 2.5% to 2,588 yen and retreated from the increase of more than 8% in Friday’s trading.

Toyota Motor increased 12 yen to 2,644 yen and Honda Motor Co. fell 92 yen to 2,406 yen and Nissan Motor Co Ltd added 12 yen to 735 yen.

Sony Corp decreased 27 yen to 1,682 yen, Panasonic Corp fell 17 yen to 809 yen and Canon Inc increased 35 yen to 3,600 yen.

Nikon Corp extended gains for the second day by 1.8% to 1,789 yen after first half net income was 39% higher than the previous estimate on better than expected sale of digital cameras.

Olympus Corp decreased 7 yen to 1,210 yen and Tokyo Stock Exchange said company faces shareholder lawsuit and inquiry from the exchange.

Fanuc Ltd decreased 140 yen to 12,930 yen and Kyocera closed up 60 yen at 7,010 yen and Sharp Corp fell 2 yen to 735 yen.

Ebara Corp plunge 11% to 291 yen after the fluid machinery and pumps maker lowered full-year net income by 39% to 8 billion yen.

Mitsui OSK Lines, Ltd decreased 13 yen to 308 yen, Kawasaki Kisen Kaisha, Ltd closed down 3 yen to 163 yen and Nippon Yusen K.K. fell 5 yen to 201 yen.

Mitsui OSK declined after it lowered its current year annual net to 4.1 billion yen compared to its previous estimate of 17 billion yen. Nippon Yusen KK estimated a full-year net loss.

Dai-ichi Life fell 3% to 90,700 yen as investors see hurdle in the implementation of the latest debt agreement in the euro zone.

Fujifilm Holdings Corp dropped 2.3% to 1,950 yen after the company lowered its annual net outlook by one third and blamed on the strong yen.

Property and Casualty insurers declined on the mounting losses related to Thailand floods.

MS & AD Insurance Group Holdings, Inc fell 3.1% or 51 yen to 1,614 yen and NKSJ Holdings Inc fell 57 yen to 1,596 yen.

Mitsubishi UFJ Financial Group fell 8 yen to 345 yen and Sumitomo Mitsui Financial Group decreased 37 yen to 2,216 yen.

Mitsubishi Corp decreased 18 yen to 1,641 yen and Mitsui & Co, Ltd fell 16 yen to 1,165 yen. Marubeni Corp decreased 4 yen to 464 yen.

Komatsu Ltd decreased 47 yen to 1,976 yen and Hitachi Construction Machinery Co decreased 20 yen to 1,540 yen.