Nikkei Reverses Early Losses to Close Up 0.49%

123jump.com Staff
09 Jan, 2008
New York City

The Japanese indices lost in the morning trading affected by the overnight U.S. declines, but in the afternoon session investors resumed hunting for bargain buys. In late Tokyo trading, the dollar advanced to mid 109-yen levels. Nikkei 225 bucked a 0.2% decline by mid-day slump to close up 0.49% or 70.49 to 14,599.16, while the broader Topix Index soared 19.26 to 1,422.32.

[R]5:00AM New York, 7:00PM Tokyo – The World Bank says Japan economic growth to slow to 1.8% in 2008[/R]

In Tokyo trading, Nikkei 225 bucked a 0.2% decline by mid-day slump to close up 0.49% or 70.49 to 14,599.16, while the broader Topix Index soared 19.26 to 1,422.32.

In the first section of the Tokyo Stock Exchange 9.8 billion shares worth 1.2 trillion yen were traded and, in the second section, 261million shares worth 4.3 billion yen changed hands.

Of the Nikkei 225 stocks 144 gained, 71 declined, and 10 were unchanged. Shimizu Corporation led advancers with a rise of 6.85% followed by Sumitomo Metal Industries climbing 6.59%.

Commodity stocks gained as well as metal prices increased. Sumitomo Metal Industries rose 5.01% and Mitsui & Company soared 4.85%.

The World Bank reported yesterday in its Prospects for Global Economy report that it projects economic growth in Japan will slow to 1.8% in 2008 on the back of the global credit crunch and a strengthening yen. The Bank expects growth in terms of GDP to have recorded 2.0% in 2007, followed by 2.2% in 2006.

According to the World Bank, developments in the U.S. are expected to influence conditions in Japan. “Inflation is not yet permanently in positive territory, making it unlikely that Bank of Japan will follow its initial tightening steps with further increase in interest rates,” read the report.

Bank of Japan Governor Toshihiko Fukui said in a speech marking 150 years of Franco-Japanese diplomatic relations at the Banque de France in Paris yesterday that globalization is making it impossible for central bank’s to assess the economic situation without taking a look at global economic trends.

Fukui added that central bank cooperation is becoming more important as financial transactions are faster and deeper such that “if a shock occurs in one country, it will immediately spill over onto numerous other financial markets”.

Kyodo news online reported today that Japan Patent Office has cut filing and other fees for trade marks by an average 43% and for patents by 12%.

Applications and maintenance of patents for 10 years will be lowered for the first time since 1984 from 480,000 yen to 430,000 yen, while applications and renewal fees for trademarks will be cut for the first time in four years from 130,000 yen to 70,000 yen. The necessary legislation will be submitted to the ordinary Diet session this month as reductions are scheduled in June.

Of the Nikkei 225 index shares Shimizu Corp led advancers with a rise of 6.85% followed by gains of 6.59% in Sumitomo Metal Industries, 6.40% in Obayashi Corporation, 5.12% in Sekusui House, and 5.01% in Sumitomo Metal Mining.

Commodity stocks rose on rising metal prices and as platinum prices for December delivery climbed 1.1% to 5,370 yen a gram on the Tokyo Commodities Exchange.

Exporters also gained after the yen fell from 109.31 to 109.34 against the dollar. Canon Corporation spiked 0.61%, Casio Computer edged up 1.71% and Sony Corporation jumped 2.65%.

Mitsumi Electric Company led decliners of the Nikkei 225 index shares with a fall of 4.62% followed by losses of 4.52% in NTT Data Corporation, 3.78% in Trend Micro Incorporated, 3.74% in Nippon Soda Company, and 3.29% in Advantest Corporation.

NTT Data Corporation fell after it said today its tender offer for German information service company Intelligence AG was successful.

Nikkei news online edition reported today that Matsushita Electric Industrial Company will construct a new facility for about 95 billion yen to boost output capacity at its chipmaking plant in Toyama Prefecture.