Nikkei Up 3%, Asia Rebounds

123jump.com Staff
20 Aug, 2007
New York City

Nikkei 225 in Monday trading jumped 3% after the rate cut in the U.S. Other exchangs in the region gained as well. Hong Kong, Indonesai, Korea, and Singapore jumped 6% or more. Among th stocks in the Nikkei 225, 50 stocks jumped more than 5%. Japan and Indonesia are in a deal to lower tariff on exports and increase investment in the mining and metals sectors.

[R]7:00AM New York, 8:00PM Tokyo - Japanese stocks rebound, join world rally spurred by the rate cut in Washington. Yen retreats after record gains last week. Japan and Indonesia sign trade pact.[/R]

Japanese shares rebounded ending a week of losses from global markets volatility. Several Asian shares followed suit, buoyed by the Federal Reserve Bank rate cut by half a point to 5.75% in Washington. Tokyo jumped 3% after falling 5.4% on Friday. Of the stocks in the Nikkei 225 index, 199 stocks were up, 25 fell and 1 remained unchanged. In addition, 50 stocks gained by more than 5%.

In Tokyo trading Nikkei 225 surged 3% to 15,732.48, touching fresh 12-month highs. Exporters led the rebound on falling yen. The yen dropped to 115.3 against the dollar, from a high of 112 on Friday. The Bank of Japan intervened in the financial system again, pumping an additional 1 trillion yen to calm rates and keep the key bank rate at 0.5% amid rising cash demand.

Japan and Indonesia singed energy and trade pact meant to eliminate tariffs by over 90%. The multi-billion dollar deal allows Japan access to Indonesia’s energy in exchange for development aid. Japanese and Indonesia companies are expected to conclude deals worth $4.3 billion under the economic agreement. Prime Minister Shinzo Abe is leading a business delegation of over 200 business people visiting several Asian states including, India and Malaysia to strengthen economic ties and build new investments. Japan industrial production index for July will be released on August 31. The market expects the index to fall below the 1.3% growth in June.

Exporters rose steeply aided by a weakening yen. Of the index stocks in Nikkei 225, Sojitz Corp led up 10.3% followed by Meidensha Corp rising 10.03%. Mistumi Elec Co added 9.24%, Mitsui Eng and Shipb higher 9.11% while Daikin INDS lifted 8.90%. Financial stocks recovered from severe losses last week. At least 8 shares gained for every 1 on the decline. Bottom 13 shares fell by more than 1%. Tokyo losses were restricted to below margins of 4%. Mitsub Logistics led down 3.28%, Toppam Printing fell 2.6% while Meiji Dairies Co dropped 2.62%. KDDI Group lost 2.53% with EISAI Corp down 2.42% anchoring the top five losses.

Kubota Corp reported it will invest 5.9 billion yen in tractor manufacturing joint venture with Thailand firm, Siam Cement Public Co Group, the group announced Monday. Operations will begin in March 2009. The partnership will be capitalised to the tune of 3.7 billion yen. The stock closed up 2.30%.