Weekly Gain of 1.2% in Tokyo

123jump.com Staff
21 Sep, 2007
New York City

In Tokyo trading Nikkei 225 index fell 0.6% to close at 16,312.61. For the week, Nikkei gained 1.2% and Topix advanced 0.5%. Sharp is in a deal with Pioneer Corp to buy 14% of the company. Pioneer will acquire 0.5% in Sharp. Misui Fudosan is in advanced stages of discussion with Cerberus Capital to buy its 33% stake in Imperial Hotel. Record oil prices lifter Inpex. Sharp rise in metals prices helped stocks of metals trading and mining companies.

[R]6:00AM New York, 7:00 Tokyo, Japan trades in negative territory closing 0.62%. Commodity and energy stocks continue on bullish streak.[/R]

Japan traded in negative territory after the U.S. Federal Reserve Chairman Bernanke intimated that prospects of a housing and economic recession in the U.S. are real, Japan’s prime export market. Of the Nikkei 225 stocks, 80 rose, 136 declined and 9 remained unchanged.

In Tokyo trading, the Nikkei 225 lost 101.18 or 0.62% to 16,312.61, while the broader Topix index shed 0.94% to 1,552.07. For the week Nikkei 225 index advanced 1.2% and Topix gained 0.5%.

Japan’s benchmark 10-year yield jumped to a five-week high of 1.7000%, tracking a surge in U.S. yields on the inflation worry. The Bank of Japan will be waiting for the Tankan survey, which measures business activity, to be released on October 1. A solid Tankan, will assure the BOJ that a 0.75% rate hike is possible.

A government survey on Thursday showed that companies planned to increase spending on capital equipment by 7.5% this year, compared. Japanese businesses increased investment by 10% in 2006, the fastest in 16 years. Also economists are pessimistic that the new Japanese premier to be elected on Sunday, widely tipped to be Yasuo Fukuda, will have the flexibility to carry out significant economic reforms.

Mitsui Fudosan Co., Japan's biggest real estate company, is in advanced talks with Cerberus Capital Management to purchase 33% stake in Imperial Hotel Ltd for 90 billion yen. The Japanese government said yesterday commercial land prices gained 1% overall, the first increase since 1991. Imperial Hotel jumped 18% or 1,000 yen to 6,590 yen at the close of trading.

Sharp Corp and Pioneer Corp are in a deal to extend cross holding between two companies. Sharp will acquire 14% stake in Pioneer at 41 billion yen and Pioneer will purchase 0.9% stake in Sharp. Pioneer fell 2.2% to 1,370 on the news, earlier the stock had jumped nearly 3%.

Financial stocks decliners with Mitsubishi UFJ Nicos leading the Nikkei 225 index stocks shedding 32 yen or 13.4% on forecasts of a net loss of 111.8 billion yen for the year ending March 31 against projections of a 15.5 billion yen profit. The parent company Mitsubishi UFJ fell 4% to 1 million yen.

Resona Holdings fell 15,000 yen or 7.98%, followed by Credit Saison, which tumbled 170 or 6.31%. Movie and motion picture maker Toho Corporation declined 5.03% while Terumo Corporation fell 2.60 or 4.46%. Mitsubishi UFJ Financial Group fell 3.81% after saying it will take full ownership of an unprofitable credit card unit.

Leading export companies declined as they bore the brunt of a weakening dollar. Toyota lost 1.94%. The sell-off also affected Honda, Canon and Sony, which plunged 3.10%, 2.23% and 1.84% respectively.

Commodity stocks led the advancers as on rising metal and oil prices improved earnings sentiment. Tokyo Dome Corp gained 78 yen or 15%, followed by Sumitomo Metal Industries, which gained 6.33% on increased steel prices. A measure of six metals traded on the London Metals Exchange, jumped 4.6% on Thursday. Nickel led the gainers with a rise of 10% followed by sharp rises in zinc and copper.

Sumitomo Metal Mining and Sumitomo Chemical led the top five gainers firming 5.12% and 3.53% trekking the upward movement of commodities on the market.

Japanese biggest oil refiner Inpex firmed 2.5%. Crude oil prices surged for the seventh straight day on front month contract closing at a new record of $83.32 per barrel.

Canon plans to invest about 80 billion yen to build a factory in northern Japan to make ink cartridges for printers and photocopiers.

Casio Computer Company expects a 10 billion yen investment in new telephone models to return a profit in the first year, helped by sales of handsets equipped with its Exilim camera and G-Shock watch technologies, the company said. Casio close down 1.1%.