Longest Losing Streak in Japan

123jump.com Staff
03 Jul, 2008
New York City

Stocks in Japan continue to slide for the eleventh session in a row. Rising crude oil prices, persistent worries related to credit markets and weakening consumption is keeping investors on the sidelines. Steelmakers fell after weak global auto demand for Japanese makers dragged stocks lower. Nikkei 225 index, as tracked by Nikkei News report the longest losing streak in the last five decades.

[R]5:00AM New York, 7:00PM Tokyo - Nikkei’s losing streak extends the most in 54 years.[/R]

Stocks in Japan fell for the eleventh trading day in a row extending its losing streak the most in half a century. Metal prices retreated and slowing demand for automobiles dragged steel makers lower.

Weak Market Sentiment Persists

In Tokyo trading Nikkei 225 fell 0.16% or 20.97 at 13,265.40, and the broader Topix Index slipped 0.2% or 3.13 at 1,298.02.

In the first section of the Tokyo Stock Exchange 10 billion shares worth 1.1 trillion yen were traded and in the second section 247 million valued at 3.4 billion yen changed hands.

Of the Nikkei 225 stocks 94 gained, 126 declined, and 5 were unchanged. Fuji Heavy Industries in the index shares with a rise of 5.43% followed by JGC increasing 5.12%.

LDP Lobbies for Wealth Fund

The Nikkei News reported that a panel of the ruling Liberal Democratic Party today proposed to form Japan''s first sovereign wealth fund, which would be financed with about 10 trillion yen in public pension assets.

The fund will be able to generate high returns in the wake of the country’s aging population, falling birth rate and the rising risks of inflation as commodity and raw material prices increase.

The proposals include the setting up of a company that will start with 30 staff members- including fund managers and financial market professions- and calls on the state fund to allocate 67% of its assets to Japanese bonds, while the remainder is channeled to for riskier assets such as stocks, overseas securities, and other derivative instruments.

Panel head Yuji Yamamoto said today that the proposal will be forwarded to Prime Minister Yasuo Fukuda.

Gainers & Losers

Fuji Heavy Industries led advancers in the Nikkei 225 index shares with a rise of 5.43% followed by increases in JGC of 5.1%, in Shinsei Bank Ltd. of 5%, in Pioneer Corp. of 4.13%, and Kajima Corp. of 4%.

Inpex Holdings gained 0.74% as crude oil for August delivery rose 0.6% to a record $144.44 a barrel in New York today after Russian President Dmitry Medvedev forecasted that oil price may climb to $150 and higher prices were predicted by Libyan oil minister a week ago.

Pioneer Corp rose on news reports that the company will sell its factory in Kagoshima Prefecture of Kyushu Island, to Field Emission Technologies Inc.

Nippon Light Metal led decliners in the Nikkei 225 index shares with a drop of 5.26% followed by losses in Nippon Light Glass of 4.84%, in NGK Insulators of 4.47%, in Asahi Glass Co of 4.44%, and Mitsubishi Corp of 4.43%.

Nippon Light Metal and other commodity stocks fell as gold lost 1.1% to $939.2 a troy ounce. Aluminium fell 0.2% to $3,150 a ton, zinc dropped 0.3% to $1,920 a ton but copper rose 0.2% to $8,630 a ton.

Toho Zinc slipped 4.20%, Sumitomo Metal Mining dropped 3.49% and Mitsui & Co of 3.55%.

JFE Holdings declined 3.90% on concern demand for automobile companies is slowing and after Merrill Lynch warned that ``bankruptcy is not impossible'''' for General Motors.

Kirin, Fonterra May Partner

Kirin Holdings may partner with New Zealand dairy company Fonterra Cooperative Group to acquire Dairy Farmers, Australia''s second-leading milk producer according to a news report in Nikkei News.