Weekly Loss of 3% in Tokyo

123jump.com Staff
19 Oct, 2007
New York City

Nikkei 225 index in Tokyo fell 1.71% to close at 16,814.37 reflecting weakness in Asian markets. Investors paid attention to the lower closing in Europe and comments from the Governor of the Bank of Japan. After a meeting with the Fed chairman Bernanke, he said that credit market dislocation is taking longer to stabilize than estimated earlier. Oil rose above $90 per barrel and lifted explorer and other energy related stocks.

[R]6:00AM New York, 7:00PM Tokyo – For the Week stocks in Japan fell 3%.[/R]

In Tokyo trading Nikkei 225 fell 1.71% or 291.72 to 16, 814.37 on Friday and 3 % for the week, while the broader Topix Index declined 2.1% or 33.66 to 1,584.69 and 4.2% for the week.

Of the Nikkei 225 stocks 20 advanced, 200 declined, and 5 were unchanged. Kyowa Hakko Kogyo led the gainers in the index with a surge of 16.64% on news that Kirin Holdings is in talks to acquire the pharmaceutical firm to strengthen its drug business. Exporters fell on a rising yen.

In the first section of the Tokyo Stock Exchange 17 billion shares valued at 2.4 trillion yen were traded and in the second section 391 million shares valued at 8.5 billion yen changed hands.

Bank of Japan Governor Toshihiko Fukui said, yesterday after meeting with the U.S. Federal Reserve Bank chairman Ben Bernanke, that it is taking longer than expected to stabilize the credit markets. He added that conditions in the financial markets are still uncertain.

Bank of America and Washington Mutual are the two banks to report losses from the credit market turmoil in the U.S. More than fifteen institutions have reported losses of nearly $28 billion in the last three months from the credit market malaise.

Nikkei reported today brewer Kirin Holdings is in talks to acquire a controlling stake in Kyowa Hakko Kogyo and list the business as its subsidiary. Market watchers value the pharmaceutical company at more than 300 billion yen if a 30% premium is paid. Kirin is seeking to augment its revenue streams that have been after by declining beer production.

Crude oil prices rose to $90.02 per barrel lifting the oil company Inpex Holdings 0.8%. Record price in crude oil in international market partly reflects dollar weakness and investors desire to diversify away from the U.S. stocks.

Of the Nikkei 225 index shares, Kyowa Hakko Kogyo led advancers with a surge of 16.44%, followed by gains of 5.11% in Clarion Company Limited, 4.95% in Credit Saison Company, 4.46% in Yahoo Japan Corp, and 2.40% in Shinsei Bank Limited.

Consumer lenders rose after Acom Co., Ltd revised its forecast for operating and net income. The company issued the revised consolidated operating income forecast for the first half of the fiscal 2008 63% to 49,398 million yen from 30,300 million yen. However net income estimate was revised lower to 24,845 million yen from 29,500 million yen. Net income per share was lowered from yen to 158.05 yen.

The company added in the press release that In addition to expected 4.9 billion yen increase in interest on loans receivable, bad-debt-related expenses and other operating expenses are expected to decrease by 8.5 billion yen and 3.1 billion yen, respectively.

Acom stock surged18% on the news lifting Aiful and Takefuji as well.

Comsys Holdings Corp led the decliners in the index with a plunge of 8.10% after Nikko Citigroup cut its target price, followed by losses in Sumitomo Osaka Cement Company of 5.45% on lowered rating from Mizuho Financial, in Tosoh Corp of 5.09%, in Sumitomo Corp of 4.65% and Matsushita Electric Work of 4.56%.

With talks of weak dollar intensifying in the currency markets, Sony declined 2.03%, Honda Motor Corp fell 1.39%, and Canon lost 2.79%.

Electric companies fell as Dai-Dan Co lowered its profit forecast for the current year to a 17-year low by three-quarters. Fuji Electric Holdings declined 1.67% and Denso Corp retreated 1.98%.