Yen and Japan Stocks Gain

123jump.com Staff
05 Dec, 2007
New York City

Stocks in Japan fell at the opening and declined 0.7% before recovering to close up 0.8%. Nikkei 225 index closed up 128.69 to 15,608,88. Topix index closed up 0.7% to close at 1,526.63. Mizuho Financial group plans to inject 150 billion yen in Mizuho Securities after sub-prime investment losses.

[R]5:00AM New York, 7:00PM Tokyo - Tokyo stocks closed up 0.83%. Liberal Democratic Party to begin meeting today to consider establishing a sovereign wealth fund.[/R]

Japan’s stock averages snapped morning losses after the yen appreciated against the dollar and closed at 110.33.

In Tokyo trading Nikkei 225 reversed a 0.7% slump in the morning session to rise 0.83% or 128.69 to 15, 608.88, while the broader Topix Index snapped a 0.8% decline in morning trade to close 0.73% or 11.13 to 1,526.63.

In the first section of the Tokyo Stock Exchange 8.7 billion shares worth 1.0 trillion yen were traded and 354 shares valued at 7.8 billion yen changed hands in the second section.

Of the Nikkei 225 stocks 135 climbed, 82 declined and 8 were unchanged. Nikon Corp led gainers with a rise of 6.38%, followed by Kyowa Hakko Kog soared 5.89%. Exporters gained as well. Canon Incorporated climbed 0.87%, Toyota Motor Corporation surged 0.16% and Honda Motor Corp firmed 0.54%.

U.K Daily Telegraph reported yesterday that the Bank of England has prepared contingent plans to bail depositors with troubled mortgage lender Northern Rock if it were to be nationalized.

Nikkei news reported today that Mizuho Financial Group would inject 150 billion yen into Mizuho Securities Company after the losses in the U.S. sub-prime investments. Under the terms of the transaction, the securities unit would raise the money through selling new shares to Mizuho Corporate Bank.

Bloomberg news reported today that secretary general of the Japan’s Liberal Democratic Party 40-member panel Kotaro Tamura said the panel would begin deliberations today to establish a sovereign wealth fund. It is believed that the fund would enable the Japan to manage interest earned from the nation’s foreign exchange reserves, public pensions and real estate holdings more efficiently.

Liberal Democratic Party policy chief Sadakazu Tanigaki said last week the next Bank of Japan Governor to replace Toshihiko Fukui in March 2008 should have experience so that the “Bank of Japan to effectively communicate with financial markets”.

Tanigaki added that global credit market turmoil had made it imperative for the new Governor to closely monitor the world economy and market before setting monetary policy. Economists favor deputy Governor Toshiro Muto to take over the post.

Of the Nikkei 225 index shares Nikon Corp led advancers with a rise of 6.38%, followed by gains of 5.89% in Kyowa Hakko Kog, 4.97% in Casio Computer, 4.76% in West Japan Railway, and 4.66% in Clarion Company Limited.

Retailers firmed after UBS Securities said domestic demand and personal consumption might recover on smaller increase in pension and tax burdens. Seven & I Holdings rose 3.7%, J Front Retailing surged 3.3%, and Marui Group soared 3.7%.

Toho Zinc Company Limited led declining Nikkei 225 index shares with a decline of 4.35% followed by losses in JFE Holdings of 3.65%, in Oki Electric Industries of 3.61%, in Nisshinbo Industries of 3.55%, and Comsys Holdings of 3.36%.

Commodity related stocks declined after the price of metals retreated. Nippon Steel slumped 2.29% and Sumitomo Metal Mining slid 2.95%.

The mobile communications company sold 20 billion yen of 1.5% seven year bonds to yield 38 basis points more than Japanese government securities. According to Mizuho Securities Company, KDDI Corp also priced 40 billion yen of the 1.3% five year bonds to yield 32 basis more than the government debt, while pricing 20 billion yen of 2.07% of three year securities to yield 29 basis point more than the government bonds.