Fukoka Financial Plunge, Tokyo Stocks Down

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

In Tokyo trading Nikkei 225 plummeted 1.49% or 199.8 at 13,250.43, and the broader Topix Index fell 1.8% or 22.94 at 1,282.69. Diet in Japan is expected to vote on the appointment of Masaaki Shirakawa as the BOJ governor. The post had been vacant for the first time in eighty years. Separately, private report showed that corporate bankruptcies rose 7.7% in fiscal 2007, for the second year in a row.

[R]5:00AM New York, 7:00PM Tokyo – Retailer Aeon fell after it lowered its annual revenue estimate. Corporate bankruptcies in Japan rose on tighter domestic conditions.[/R]

Market Sentiment

In Tokyo trading Nikkei 225 plummeted 1.49% or 199.8 at 13,250.43, and the broader Topix Index fell 1.8% or 22.94 at 1,282.69.

In the first section of the Tokyo Stock Exchange 7.6 billion shares worth 869 billion yen were traded and in the second section 246 million shares valued at 3.7 billion yen changed hands.

Of the Nikkei 225 stocks 38 increased, 176 declined and 11 were unchanged. Fukuoka Financial Group led decliners in the Nikkei 225 index shares with a drop of 12.77% after reporting that it missed its annual profit forecast by 92% on increased write-downs of securities and declining sales of investment funds.

Shirakawa to decide on interest rate tomorrow

The interim chief of the Bank of Japan Masaaki Shirakawa is expected to keep the key interest rate on hold as the central bank continues to assess both the upside and downside risks to the country’s economy.

Prime Minister Yasuo Fukuda yesterday nominated Shirakawa for the top post and proposed Hiroshi Watanabe as deputy governor.

Speaking at a parliamentary hearing on his nomination, Shirakawa emphasised the need for the central bank to expedite the appointment, which has been left vacant for the first time in 80 years.

Parliament will vote tomorrow on the appointment of both Watanabe and Shirakawa.

Corporate bankruptcies rise 7.71% for 2007

Japan Today reported that Tokyo Shoko Research, a private credit research institute, said the number of corporate bankruptcies increased for the second consecutive year by 7.71% to 14,366 in fiscal 2007 from a year earlier.

Also the debt they left behind grew for the first time in seven years by 6.41% to 5.80 trillion yen.

Gainers & Losers

Sky Perfect JSAT led advancers in the Nikkei 225 index shares with a rise of 6.01% followed by rises in Trend Micro Inc of 3.88%, in Nippon Suisan of 2.77%, in Nissan Chemicals Industries of 2.52%, and Comsys Holdings of 2.36%.

Commodity and energy stocks rose after the crude oil for March delivery increased 2.7% to $109.09, while coal stocks spiked prompted by speculation that the continued increase in crude oil prices will spur demand for alternative fuels.

Toho Zinc Co Ltd advanced 1.27% and Sumitomo Metal Mining edged up 0.68%.

Fukuoka Financial Group led decliners in the Nikkei 225 index shares with a decline of 12.77% followed by losses in Aeon Co. Ltd. of 7.52%, in Tokai Carbon Co. of 6.13%, in Shinko Securities of 6.01%, and Sumco Corp. of 5.58%.

Brokerages Merrill Lynch & Co. and Nomura Holdings Inc. also downgraded the ratings on Fukuoka stock.

Retailer Aeon plummeted after it reported that its annual profit for the year ending February 2009 might decline as low as 11 billion yen from 44 billion yen in the same period a year ago.

Chipmakers also fell after iSuppli markedly slashed the 2008 sales estimates for chips used in both cameras and mobile phones from 27% to 9%. Advantest Corp. shed 5.53% and Tokyo Electron fell 3.78%.


JFE Holdings Inc and IHI Corp to merge shipbuilding operations

JFE Holdings and IHI Corp. today made a joint statement on the stock exchange expressing their intention to merge their shipbuilding operations creating the world’s sixth largest shipbuilder.

IHI wholly owned IHI Marine United Inc. unit will be merged with Universal Shipbuilding Corp., which is 85% owned by JFE with annual sales of 345 billion yen.