Tokyo Stocks Rebound, Dollar Drops

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

Ahead of the U.S. new home construction report, dollar fell in Asia and in Europe. Stocks in Japan rebounded after a week of losses but managed to gain a fraction. Weak metal prices in the Asian region did not prevent Japanese metals and mining companies to rise. Shinsei Bank has agreed to sell 33% stake to private equity group controlled by J C Flowers. Aozora Bank and Sumitomo Trust & Banking to explore joint loans and asset management.

[R]5:00AM New York, 7:00PM Tokyo – Tokyo stocks rebounded on weak yen, falling metal prices, and the U.S. private equity investments.[/R]

Deals and weakening yen leads Tokyo up 1.12%. The Financial Services Agency considers relaxation of bank investment restrictions.[/R]

Japanese stocks recovered from a 1.5% slump by mid-day to close up 1.12% on deals and a weakening yen.

In Tokyo trading Nikkei 225 gained 1.12% or 168.96 to 15,211.52, while the Topix Index gained 12.66 to 1,469.27.

In the first section of the Tokyo Section Exchange 11 billion shares worth 1.2 trillion yen were traded and in the second section 394 million shares value at 5.7 billion yen changed hands.

Of the Nikkei 225 stocks 148 gained, 67 retreated, and 10 were unchanged. Shinsei Bank Limited led gainers, rising 9.34% after the U.S. investment fund J.C. Flowers & Company announced its plans to raise its stake in Shinsei Bank Limited to help its capital base.

Exporters also gained as the yen weakened from 109.76 to 110.14 against the dollar.

Metal prices declined as comments by Governor of the China Central Bank Zhou Xiaochuan that the central bank would continue to “withdraw liquidity” to cool economic expansion stoked expectations demand for metals might fall. Copper futures plunged 5.4% as a result. However, Sumitomo Metal Mining and Nippon Mining gained 4.26% and 1.49% respectively.

Canon Incorporated rose 0.18%, Honda Motor Corporation climbed 1.32% and Sony Corporation rose 0.19%.

Shinsei Bank Limited shareholders agreed on an offer led by U.S investment fund J.C. Flowers & Company LLC to increase its equity in the financial institution to 32.6% for 202 billion yen. The offer, at 425 yen per share, is at a 17% premium at yesterday’s closing price. Shinsei Bank will sell 50 billion yen worth of new shares as part of the deal.

Nasdaq.com reported yesterday that Japan’s Financial Services Agency is considering relaxing rules to allow banks to fully trade commodities and futures and ad releasing a ban on bank involvement in greenhouse gas emission trading. The move is meant to broaden bank’s operations by investing in non-financial firms operated through subsidiaries.

Nikkei News reported today Cerberus Partners LP owned Aozora Bank Limited will ally with Sumitomo Trust & Banking Company in real estate, capital management and private equity investments. The tie-up would allow Sumitomo Trust and Aozora’s debt collection unit to boost corporate clients list and give Aozora’s customers access to loans and property backed loans.

Bloomberg news reported today that Boeing is in talks with Toray Industries to expand a $6 billion contract and supply carbon-fiber sheet for the 787 Dreamliner, the passenger jet whose production is scheduled to begin in November next year. Toray Chief Executive Officer Sadayuki Sakakibara said the company might raise production of re-inforced plastic sheets to supply 14 787 a month in 2010.


Of the Nikkei 225 index shares, Shinsei Bank Limited led the gainers with a rise of 9.34%, followed by rises in Chuo Mitsui Trust of 7.77%, in Tosoh Corporation of 6.99%, in Sojitz Corporation of 6.75, and in Mitsubishi UFJ Nicos of 6.64%.

Yokohama led the decliners in the Nikkei 225 index stocks with a loss of 4.29%, followed by losses of 3.40% in Nippon Sheet Glass, 3.16% in Sumpo Japan Insurance, 2.99% in Tokai Carbon Company, and 2.65% in Shimizu Corporation.

Goldman Sachs yesterday lowered its rating to ‘sell’ on Citigroup and estimated that the bank may have to record a loss on collaterized debt obligations up to $15 billion over the next two quarters, adding to $11 billion in writedowns this month.