Yen Dropped to 7-year Low, Moody's Cuts Japan Credit Rating

Hiruki Nakamura
01 Dec, 2014
New York City

Indexes in Japan extended gains and the Topix index increased to a new six-year high and airlines surged after oil price dropped to a new four-year low. Moody

[R]4:30 PM Tokyo – Indexes in Japan extended gains and the Topix index increased to a new six-year high and airlines surged after oil price dropped to a new four-year low. Moody’s lowered Japan government credit rating by one notch and the yen declined to a seven-year low.[/R]

Stocks in Tokyo gained and the yen regained its downward trend after a flood of economic news in Asia were overshadowed by the sharp plunge in oil price.

The latest manufacturing survey from Chinese government showed slowing growth in November and airlines surged after oil dropped at a new four-year low.

The Nikkei 225 Stock Average gained 130.25 or 0.7% to 17,590.10 and the broader Topix index jumped 11.31 or 0.8% to 1,421.65.

The yen slipped 0.5% to 118.27 against one dollar.

Moody’s Investors Service lowered credit rating of Japan government by notch to A1 and the U.S. based rating service company said there are uncertainties regarding the impact of Japan’s growth initiatives and whether the new government will be able to meet its deficit-reduction target.

The yield on 10-year Japanese government bond was nearly unchanged and gained 0.5 basis point to 0.43%, the lowest since April 2013 when the yield had dropped to as low as 0.315%.

Stocks in Review

Access Co Ltd plunged 7.7% to 527 yen after the mobile application developer lowered its revenue forecast for the year ending in January to 7.5 billion yen and a net loss of 1 billion yen.

Marubeni Corporation fell 0.3% 745.70 yen after the U.S.-based private equity firm CVC Capital Partners Ltd agreed to acquire about 50% stake of Arteria Networks, a telecommunications subsidiary of Japan-based diversified conglomerate for about $150 million.

Pola Orbis Holding Inc soared 6.6% to 4,495 yen after the cosmetic product maker lifted net income forecast for the year to 9.7 billion, an increase of 10% from a year ago period.

The company estimated annual revenues to jump to 198 billion and operating profit at 17.65 billion yen.

The company said it is also close to selling its Tokyo real estate this month for about 5.93 billion yen.

The company increased total dividend to 147 yen per share for the year ending in December, including regular dividend of 47 yen per share.

Sumitomo Metal Mining Co., Ltd declined 4.3% to 1,739.50 yen after the voters in Switzerland rejected the referendum to force the Swiss National Bank to maintain at least 20% reserves in gold.