Tokyo Surges 2.5%

123jump.com Staff
14 Nov, 2007
New York City

Stocks i Japan rebounded afte eight days of losses in a row. Nikkei 225 index closed up 2.5% to close at 15,499.56. Exports, energy, and banks led the gainers. Markets in Asia rose sharply across the region after commnets from financial executives of leading banks and broerages indicated that new exposure to sub-prime loan losses are limited. Market averages in New York jumped between 2.5% and 3.5% lifting averages across Asia. Global semiconductor sales are likely to rise 3.8% in 2007.

[R]5:30AM New York, 7:30PM Tokyo – Tokyo rebounded 2.5% on the strength in the New York.[/R]

Nikkei 225 Index rose for the first time in nine-days with a gain of 2.47% on waning fears over credit market losses and better than expected earnings from the largest retailer Wal-Mart.

In Tokyo trading Nikkei 225 rose 2.47% or 372.93 to 15,499.56, while the broader Topix Index gained 42.98 to 1,497.71.

In the first section of the Tokyo Stock Exchange 9.7 billion shares worth 1.2 trillion yen were traded compared to 9.9 billion shares worth 1.2 trillion yen traded yesterday, while 278 million shares valued at 5.7 billion yen changed hands in the second section.

Of the Nikkei 225 stocks 204 climbed, 19 retreated, and 2 were unchanged. Of the index stocks, 26 stocks gained 4% or more.

Commercial bank Chiba Bank Limited led gainers, rising 10.09%, followed by increases in IHI Corp of 8.94%. Financial stocks gained as well on easing credit worries. Mitsubishi UFJ Financial Group rose 6.26%, Mizuho Financial Group jumped 6.38% and Sumitomom Mitsui Financial Group soared 8.49%.

Goldman Sachs chief executive Loyd Blankfein said yesterday at a Merrill Lynch sponsored conference it does not expect to be making any significant writedowns on mortgage related securities. Bank of America reported a write-down of $600 million and chief executive of JP Morgan said that the loss exposure to collaterized loans is not significant. Investors breathed a sigh of relief after commnets from the executives and Bank of America loan loss that met earlier estimates.

Wal-Mart Stores, the largest retailer, also announced yesterday that the company third quarter sales rose 9% and earnings gained 8%.

Nikkei News reported today 10-year Japanese bonds fell to a 26-month low of 1.49% yesterday, compared to the 1.5% average dividend yield on Topix index stocks.

The World Semiconductor Trade Statistics said yesterday on its website it expects the global semiconductor market to grow 3.8% to $257.2 billion in 2007. The association revised its projection upwards by 1.5% compared to its previous forecast in May of this year. Projections for 2008 and 2009 were maintained at 9.1% and 6.2% growth correspondingly.

Of the Nikkei 225 index shares, Chiba Bank Limited led advancers, rising 10.09%, followed by gains of 8.94% in IHI Corp, 8.70% in JGC Corp and 8.49% in Sumitomo Mitsui Financial Group and 8.19% in Comsys Holdings.

Exporters also gained after the yen retreated for the second day as investors resumed buying high yielding assets that are funded by Japanese loans. The yen was quoted at 111.27 at the close of trade compared to 109.22 against the dollar yesterday. Sony Corporation soared 2.47%, Toshiba Corporation firmed 3.84%, and Toyota Motor Corporation jumped 3.65% on the news.

Chipmakers also gained after the World Semiconductor Trade Statistics, forecasted sales would probably climb this year. Advantest Corp rose 1.99% and Sumco Corporation spiked 7.80% on the news.

Bloomberg news reported today that UBS said in a report it expects steelmaker’s profits to show robust recovery in the fourth quarter, adding that steel prices will remain firm in 2008 buoyed by rising demand in emerging markets such as China and India. Nippon Steel gained 4.64% on the news.

Kajima Corporation led decliners, falling 7.51%, followed by losses in Taiheiyo Cement of 4.89%, in Toho Zinc Company of 3.03%, in Asahi Brewers of 2.04% and Nippon Oil Corp of 1.23%.

Shinsei Bank Limited said today first half net income fell to 23.1 billion yen from 38.8 billion yen a year earlier. The U.S. subprime mortgage slump forced the bank to add $69 million in provisions for loans of such credits, spurring total charges to $172 million. Furthermore, Shinsei Bank said credits related to the U.S. mortgage market total $500 million compared with assets of $92 billion as of March 31. Shinsei Bank closed up 4.62%.

Mitsui & Co reported yesterday its Brazilian affiliate Multigrain SA has bought 100,000 hectares of farmland in western Bahia, western Minas Gerais and Southern Maranhao to secure a stable supply of soybeans and other farm produce. Mitsui & Co rose 0.99%.

Tokyo Electron forecasted yesterday third quarter orders would rise for 170 billion yen from 127.5 billion yen in the previous quarter. Tokyo Electron rose 4.69%.