Banks Remain Weak in Tokyo Trading

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

Nikkei 225 index closed nearly unchanged. Nervous investors dumped banks, real estate, and trading companies stocks. A drop in crude oil price helped chemical and airlines stocks. Japan Prime Minister, while visiting India, said in a Parliament address that trade between the two nations will grow three-fold. Trade surplus in July declined 21% to 671.2 billion. Exports rose 11.7% and imports increased 16.9%.

[R]7:00AM New York, 8:00PM Tokyo-Japanese shares eased in volatile trading closing virtually unchanged, as investors await Federal Reserve rates action. Japan trade surplus dips 21% in July on low yen and higher oil prices. Bank of Japan starts crucial two day meeting[/R]

Japanese stocks finished marginally lower, as several Asian shares rose. Investors largely remained at bay awaiting US Federal Reserve rates cue. Japan closed down 0.7 points. Of the 225 Tokyo stocks, 125 fell, 93 rose and 7 were unchanged. Top 25 gained over 2% while bottom 15 dragged by more than 3%. Broader index, Topix fell 4.99 or 0.3% to close at 1,544.89. Trading volume of the Topix stocks was recorded at 1.7 billion stocks and 2.3 trillion yen.

In Tokyo trading, Nikkei 225 fell 0.7 or 0% to 15 900.64 in mixed trading, as investor concern piled economic growth will slow down. The Finance Ministry said Wednesday customs-cleared trade surplus dropped 21.1% in July to 671.2 billion yen, year-on-year. Exports rose 12% to 7.1 trillion yen with imports surging 17% to 6.4 trillion yen.

The Bank of Japan started a two-day policy meeting Wednesday amid expectations that the central bank will keep its key short-term rate steady following global market turbulence triggered by the U.S. subprime mortgage crisis. The bank is widely expected to maintain the key bank rate at 0.5%. Yesterday a high-ranking official said government opposed any rate hike. The yen dropped to 115.07 per dollar from 114.83 yesterday amid speculation the BOJ will leave rates untouched.

Nikkei 225 index closed down 0.7 points at 15,900.64. Of the 225 stocks in the index 125 closed lower, 93 increased, and 7 were unchanged.

In the index stocks, Chiyoda Corp led the decliners with a fall of 6.2% followed by declines of 5.6% in Meiji Dairies, 3.9% in retailer Isetan, and 3.5% in Kajima, Sumitomo Metals and Mining, and Nippon Sheet Glass. Yahoo Japan led the gainers with a rise of 5.7% followed by increase of 4.5% in Nichirei Corp, 4.3% in Trend Micro, Tosho Corp, and NTT Data. Nippon Oil, Japan Airlines, and Sumitomo Electric closed up more than 4%.

Banks fell as investors worried that rising mortgage defaults in the U.S. may hurt earnings of Japanese banks. Resona Holdings led the decline in banks with a loss of 3.4%. Mitsubishi UFJ dropped and Sumitomo Mitsui Financial fell 1.8%. Shinsei Bank dropped 3.2%. Stocks of real estate and trading companies declined as well. Marubeni Corp fell 2.3% and Mitsubishi Estate declined 2%.

Crude oil in Asian trading fell below $70 per barrel lifting stocks of airlines and chemical companies. Japan Airlines soared 4.2%.