Japan Bonds Decline, Oil Rises

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

In Tokyo trading Nikkei 225 rose 1.48% or 203.12 to 13,893.31, and the broader Topix Index gained 1.8% or 24.07 to 1,368.25. Of the Nikkei 225 stocks 181 gained, 37 declined, and 7 were unchanged. Mitsubishi Paper Co. led advancers in the index shares with a rise of 9.05% on news strong demand for paper products is prompting major Japanese papermakers to bolster their wood chip procurement capabilities.

[R]5:00AM New York, 7:00PM Tokyo - Paper companies lift Tokyo. Outlook on Japan economy extremely uncertain.[/R]

Japan stock indexes rose led by paper companies on expectations that they will be able to weather the adverse effects of increased raw material and commodity prices.

Market sentiment

In Tokyo trading Nikkei 225 rose 1.48% or 203.12 at 13,893.31, and the broader Topix Index gained 1.8% or 24.07 at 1,368.25.

In the first section of the Tokyo Stock Exchange 6.8 billion shares worth 762 billion yen were traded and in the second section 159 billion shares valued at 4.1 billion yen changed hands.

Of the Nikkei 225 stocks 181 gained, 37 declined, and 7 were unchanged. Mitsubishi Paper Co. led advancers in the index shares with a rise of 9.05% on news strong demand for paper products is prompting major Japanese papermakers to bolster their wood chip procurement capabilities.

BOJ says economic outlook is uncertain

Bloomberg news reported that Bank of Japan Governor Masaaki Shirakawa told the upper house’s fiscal and financial committee today that rising oil and raw material prices, coupled with increasing worries on inflation are making the outlook for the economy “extremely uncertain”.

Shirakawa said the U.S. economy will remain in a moderate recession, adding that the vaccum at the Bank of Japan’s policy board was unusual and undesirable.

Currently, two positions on the nine-member board- including one of the two-deputy governors- have been vacant since the impasse between the opposition and the government in March and April.

Separately, the Nikkei news reported today that government canceled its planned submission of university professor Kazuhito Ikeo as a new Bank of Japan policy board member to parliament for approval.

Japan’s real estate firms mull big rent hikes in central Tokyo

Reuters news reported today that Japan’s real estate companies are proposing big rent hikes in central Tokyo, as office vacancy rates are near 20-year lows.

In particular, Mitsui Fudosan reported yesterday that it is in talks with tenants to hike rents in central Tokyo by an average 10% to 15%, while Mitsubishi Estate is proposing increases between 15% and 20% in the Marunouchi area of central Tokyo because of the tight office market situation in the area.

The report also notes that Mori Trust Co is considering raising office rents in central Tokyo''s Minato district by an average of 20%.

According to Ikoma Data Service System, the office vacancy rate in Tokyo’s 23 wards rose to 2.1% in April and average rent in Tokyo''s five central wards in April was 15,120 yen per approximately 3.3 square metres.

Gainers & Losers

Mitsubishi Paper Co. led advancers in the Nikkei 225 index shares with a rise of 9.05% followed by rises in Hokuetsu Paper of 7.78%, in Okuma Corp. of 5.60%, in Bank of Yokohama of 5.10%, and Mazda Motor Corp. of 4.77%.

Mitsubishi Paper Co. and other paper companies rose after the Nikkei reported today that strong demand for paper products is prompting major Japanese papermakers to bolster their wood chip procurement capabilities.

Oji Paper Co. is reportedly planning to boost production capacity by 50% at its New Zealand chip factory this autumn.

Also Mitsubishi UFJ raised its rating on the companies to “overweight” from “neutral”, while UBS AG raised its share price estimate on Nippon Paper by 7.10% to 300,000 yen.

Commodity stocks gained after oil prices rose 1% to 133.46% as supply concerns were raised after Nigerian rebels said they had attacked a pipeline owned by Royal Dutch Shell.

In addition, the Financial Times reported that traders observed that price movements were likely to be exaggerated by extremely thin levels of trade, with many participants in London and New York absent for public holidays. Mitsui & Co advanced 3.52% and Inpex Holdings increased 3.15% as a result.

Financial stocks rose as well. Mitsubishi UFJ Financial Group edged up 3.79%, Nomura Holdings increased 3.85%, and Mizuho Financial Group gained 4.09%.

Chiyoda Corp. led decliners in the Nikkei 225 index shares with a drop of 4.79% followed by losses in Alps Electric Co. of 2.88%, in Nippon Kayaku of 2.50%, in CSK Holdings Corp. of 2.11%, and Sumitomo Osaka of 1.57%.

http://malaysia.news.yahoo.com/rtrs/20080526/tbs-realestate-japan-9a48464.html
http://www.bloomberg.com/apps/news?pid=20601101&sid=a6Dcn5fuIP.o&refer=japan
http://www.ft.com/cms/s/29a5ec84-2b10-11dd-a7fc-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F29a5ec84-2b10-11dd-a7fc-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fmarkets%2Fcommodities
http://www.nni.nikkei.co.jp/