Oil and Metals Seek New Highs

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

Tokyo stocks gained for the third day in a row, nearly 5% gain, on the back of improving sentiment in the international markets. Tech stocks in Japan closed higher on the $15 billion stock buyback from IBM. Commodities, metals, and crude oil closed near record level on falling dollar. Crude oil reached $101.35 a barrel and the U.S. dollar fel to a record low against euro. Gold closed at a new high and silver added 3.5%.

[R]5:00AM New York, 7:00PM Tokyo – The BOJ Governor nomination was postponed as parties failed to agree on a consensus candidate. Crude oil traded at a record high and dollar fell to a record low against euro.[/R]

Japan stock averages rose after commodity prices gained as the dollar plummeted to record lows against the euro. IBM stock buyback of $15 billion shares provided added impetus to technology stocks.

Market Sentiment

In Tokyo trading Nikkei 225 advanced 1.49% or 206.58 to 14,031.30, and the broader Topix Index rose 1.3% or 17.05 to 1,364.52.

In the first section of the Tokyo Stock Exchange 10 billion shares worth 1 trillion yen were traded and in the second section 514 million shares valued at 6.7 billion yen changed hands.

Of the Nikkei 225 stocks 179 gained, 37 declined, and 9 were unchanged. Marui Corp led the advancers in the index shares with a rise of 9.96% after the retailer lifted its full-year profit forecast to 8.5 billion yen and announced it will spend 11 billion yen on share buyback program.

Commodities rise

Crude oil for April delivery rose 0.5% to $101.35 per barrel as the U.S. dollar sank to an all time low to $1.5 against the euro yesterday. Copper futures advanced 0.9% and silver increased 3.5%, while gold rose to a record in Asia.

The BOJ postpones the Governor nomination

Asahi news reported today that Japan postponed the nomination of the Bank of Japan Governor as differences emerged between the ruling Liberal Democratic Party and the opposition Democratic Party of Japan over the candidature of Toshiro Muto.

The DPJ believe the nomination of Toshiro Muto will threaten the autonomy of the BOJ as he is a former civil servant.

The incumbent BOJ Governor Toshihiro Fukui’s term expires on March 19.

Yen falls

The yen slipped 1.13% from 106.92 to 106.94 against the dollar at the close of trade today.

Gainers & Losers

Marui Corp. led gainers in the Nikkei 225 index shares with a rise of 9.96% followed by rises in Mazda Motor Corp. of 5.96%, in T&D Holdings of 5.06%, in Sapporo Holdings of 4.90%, and in Nikon Corp. of 4.86%.

Sapporo Holdings gained today after it rejected a takeover proposal from U.S. hedge fund Steel Partners.

Technology stocks also increased after IBM announced yesterday that its $15 billion share buyback program will boost earnings by 5 cents per share. Advantest Corp. rose 2.56% and Sony surged 2.31%.

IHI Corp led the decliners in the Nikkei 225 index shares with a fall of 6.44% followed by losses in Sumitomo Osaka of 3.36%, in Itochu Corp of 3%, in Nippon Sheet Glass of 3%, and in Sharp Corp. of 2.86%.

IHI Corp fell after the Asahi news reported that the company reported that the company failed to include losses in its power division a loss of 5 billion when it reported fiscal 2006 earnings in May 2007. The company then reported a profit of 24.6 billion yen. The revised earnings report released in December of 2007 reported consolidated operating loss of 5.6 billion yen on the account of missed operating loss of 30 billion yen. The Securities and Exchange Surveillance commission is looking to investigate the recent public offering in January 2007.

Company News

Bloomberg news reported today that Komatsu Chief Executive Officer Kunuo Noji that annual sales will rise at least 10% on rising demand from emerging markets including China, Russia and Southeast Asia.

The company is also mulling establishing an assembly plant in China to meet the rising demand.