Shipping Lines Surge on Rate Hikes

123jump.com Staff
13 Feb, 2008
New York City

Corporate Goods Price Index in Japan increased to 3% in January from 2.6% in December on the rising fuel and food prices. Financial Services Administration in Japan reported that sub-prime loan exposures to the U.S. loans of Japanese banks increased in January to 1.52 trillion yen and losses in last quarter ending in December rose to 600 billion yen. Shipping line companies gained on the talks of freight charge increases.

[R]5:00AM New York, 7:00PM Tokyo-Corporate Goods Price Index rises to 3% in January[/R]

Japan stocks indexes surged on gains in shipping lines as they raised freight charges. Investors remained cautious on the market direction ahead of the U.S. retail sales data for January.

In Tokyo trading Nikkei 225 rose 0.36% or 46.36 to 13,068.30, and the broader Topix index gained 0.1 or 0.75 to 1,285.35.

In the first section of the Tokyo Stock Exchange 20 billion shares worth 2.3 trillion yen were traded and in second section 391million yen worth 5.2 billion yen changed hands.

Of the Nikkei 225 stocks 118 gained, 97 declined, and 10 were unchanged. Sumitomo Osaka led gainers in the Nikkei 225 index shares with a rise of 9.39%.

Corporate Goods Price Index Rises

The Bank of Japan announced on its web site that the Corporate Goods Price Index jumped from 2.6% in December to 3% in January, which is the highest since March 1981.

The rate also increased 0.2% from the previous quarter on rising crude oil prices and food prices.

Subprime Losses Rise

Kyodo news online edition reported today that according to the Financial Services Agency Japan financial institution’s subprime related losses almost doubled from the previous quarter in the three months through December to 600 billion yen.

The FSA reportedly added that securities held by Japanese banks that are backed by the U.S. risky home loans also grew in the period to 1.52 trillion yen in the quarter to December from 1.41 trillion yen in the previous quarter.

Buffets Bail Out Offer

CNBC reported yesterday that Chairman of Berkshire Hathaway Inc Warren Buffet offered to assume responsibility for $800 billion in municipal bonds guaranteed by MBIA Inc. and Ambac Financial Group Inc and others.

Japanese investors were however skeptical of the offer and perceived that the offer may benefit Berkshire but is not likely to solve the problems in the subprime loan industry.

Gainers & Losers

Sumitomo Osaka led gainers in the Nikkei 225 index shares with a rise of 9.39% followed by rises in GS Yuasa Corp of 8.29%, in Alps Electric Co. of 7.05%, in Yokohama Rubber of 5.18%, in Taiheyo Cement of 5.03%.

Shipping lines also rose on rising freight charges. Mitsui O.S.K. Lines advanced 4.94%, Mitsui Engineering & Shipbuilding increased 4.6% and Kawasaki Kisen gained 4.43%.

Daiwa House Industries led decliners in the Nikkei 225 index shares with a drop of 7.76% followed by losses in Konami Corp. of 5.56%, in Denki Kigaku of 4.80%, in Nikon Corp. of 4.50, and Clarion Company Limited of 4.45%.

Company News

Asahi online news reported today that Bridgestone Corp announced yesterday at a press conference in Tokyo that it paid 150 million yen in bribes to foreign public officials in connection with the sale of rubber hoses used to transfer crude oil from tankers to onshore storage facilities.

Bridgestone President Shoshi Arakawa however said he will not resign or take responsibility.

The Nikkei reported today that Aiful Corp will raise 120 billion yen of capital by issuing new shares through convertible bond issues. The recent changes in Japan have limited the maximum interest charged for consumer loans to 20% and limited total outstanding loan that a consumer carry, and establish a designate credit bureau for consumers. There are 17,000 small lenders with largest seven lenders including GE Capital and Citigroup controlling 70% of market share.

Separately, the business online edition reported that Fujifilm Holdings will buy midsize drugmaker Toyama Chemical Co for 84.2 million yen.