Tokyo Stocks Gain, Confidence Falls

123jump.com Staff
01 Apr, 2008
New York City

Business confidence in Japan fell to a 4-year low as large and small manufacturers worry about the U.S. market for their products. Rising exports to Asia, Europe, and Middle East is helping businesses to cope with the expected decline in sales in the U.S. In Tokyo trading Nikkei 225 gained 1.04% or 130.88 to 12,656.42, and the broader Topix Index increased 1.5% or 17.53 to 1,230.49.

[R]5:00AM New York, 7:00PM Tokyo – Business confidence in Japan declined to a 4-yer low and is expected to decline further.[/R]

Stocks in Japan advanced but curtailed their earlier gains. Better than estimated rise in business activity as measured by NAPM index lifted stocks in the morning. But, weak business confidence across manufacturing companies in Japan held stocks back from climbing more.

Market Sentiment

In Tokyo trading Nikkei 225 gained 1.04% or 130.88 to 12,656.42, and the broader Topix Index increased 1.5% or 17.53 to 1,230.49.

In the first section of the Tokyo Stock Exchange 7.3 billion shares worth 867 billion yen were traded and in the second section 113 million shares worth 226 billion yen changed hands.

Of the Nikkei 225 index shares 159 gained, 55 declined and 9 were unchanged. Shionogi & Co. led advancers in the Nikkei 225 index shares with a rise of 9.17%.

U.S. business index rose more than forecasted

National Association of Purchasing Management’s business index yesterday increased from a six-year low at 44.5 in February to 48.2 in March. Economists had forecasted that the index will increase to 46.

Tankan declines to four-year low

The Bank of Japan reported today that the Diffusion Index on business conditions showed large manufacturers plummeted 8 points from 19 in December to 11 in March, while it is forecasted to fall a further 4 points to 7 in June.

The index for non-manufacturers declined 4 points from 16 to 12 and it is forecasted to increase by 1 to 13 in June. For medium-sized manufacturers the index declined by 5 points from 10 in December to 5 in March, while conditions are forecasted to fall minus 6 to minus 1 in June.

Similarly, mid-sized non-manufacturers fell by 5 points from 2 in the quarter to December to minus 3 in the three months to March and conditions are expected to deteriorate by minus 3 points to minus 6 in the quarter to June.

Also for small manufacturing companies the index fell 8 points from 2 in December to minus 6 in March and non-manufacturers declined 3 points from minus 12 to minus 15 and is projected to fall minus 6 to minus 21.

According to the survey, the index measuring demand for workers was at minus 7 for a third quarter. Also large manufacturers estimated net income will rise 2.3% this business year, compared with 11.9% last year.

Gainers & Losers
Shionogi led advancers in the Nikkei 225 index shares with a rise of 9.17% followed by increases in Konami Corp. of 5.87%, in Seven & I Holdings of 5.80%, in Tokai Carbon Co. of 5.06%, and Kasai Electric Power of 4.84%.

Chiyoda Corp. led decliners in the Nikkei 225 index shares with a drop of 11.05% followed by losses in Fujikura Ltd. of 10.22%, in Pioneer Corp. of 3.84%, in Trend Micro Inc of 3.58%, and Alps Electric Co Ltd. of 3.57%.

Company news

Lehman Brothers sues Marubeni for $350 million

The Mainichi news reported today that Lehman Brothers filed a lawsuit against Marubeni yesterday, demanding 35.2 billion yen.

Lehman Brothers Holdings Inc. is seeking to recoup funding it provided to another Japanese company that Lehman says Marubeni employees helped to secure. According to the report Lehman Brothers spokesman Matthew Russell said in a statement that there will be no financial impact on Lehman earnings.