Japan Debt Auction; GS Yuasa Surges

Darlington Musarurwa
17 Jun, 2009
New York City

Stocks in Japan edged higher defying the decline in regional markets. Real estate stocks rallied on the expectations that recent tax break will spur housing demand. 20-year government bond auction drew more investors that expected.

[R]7:00PM Tokyo, 6:00 AM New York – Stocks in Japan edged higher defying the regional decline. Real estate stocks rallied on the expectations that recent tax break will spur housing demand. 20-year government bond auction drew more investors that expected.[/R]

Stocks in Japan defied the regional markets decline after the weak industrial production data in the U.S. Investors appear optimistic that global markets may recover this year on the large government economic stimulus in Japan, China and the U.S. However, the current rally appears to be ahead of economic fundamentals.

The Japan government bond yields declined after the auction of 20 year debts drew more buyers than expected. 20-year bond yields dropped to 2.13% in 900 billion yen auction that ended with the bid-to-cover ratio of 3.6. The 10-year bond yield was unchanged at 1.466%.

The Nikkei 225 Index in Tokyo closed higher 87.97 or 0.90% to 9,840.85

Gainers & Losers

Jupiter Telecom increased 4% to 73,400 yen after it planned 10 billion yen debt offering according to the Bloomberg News.

The battery and other electric car makers in Japan closed higher. GS Yuasa surged 12.4% to 1,180 yen, Meidensha Corp surged 16% to 577 yen and Sanyo Electric surged 14% to 2799 yen.

Real estate stocks closed higher after Morgan Stanley forecasted higher home sales in the rest of the year. Japan is likely to relax gift tax that will encourage home purchases.

DA Office surged 15% to 226,900 yen after Daiwa Securities agreed to acquire 13% of the real estate investment trust for 10 billion yen. The news was first reported in the newspaper Nikkei and later confirmed by the company after the close. DA Office owns 30 properties with 265 billion yen acquisition price.

Japan Asia Group fell by its daily limit 13% to 12,900 yen after it delayed its earnings release by a week to June 24.

IHI Corp increased 1.7% to 176 yen after it agreed to acquire 77.6% of Matsuo Bridge Company for 3.16 billion yen.

Nikkei 200 Average Movers

Yahoo! Japan Corp led the decliners in the Nikkei 225 index of 4.2% followed by losses in Trend Micro Inc of 3.3%, in East Japan Railway Co of 2.6%, in Hino Motors Ltd of 2.3% and in Konami Corp of 2.0%.

Meidensha Corp led gainers in the Nikkei 225 index with a rise of 16.1% followed by gains in Sanyo Electric Co Ltd of 13.9%, in GS Yuasa Corp of 12.4% and Teijin Ltd of 10.0%.

Asian Markets Review]

The Nikkei 225 Index in Tokyo closed higher 87.97 or 0.90% to 9,840.85, Hang Seng index in Hong Kong decreased 80.90 or 0.45% to 18,084.60, CSI 300 index in China increased 49.37 or 1.67% to 3,010.59. ASX 200 index in Australia decreased 58.40 or 1.47% to 3,904.10. The KL Composite index in Malaysia decreased 3.22 or 0.30% to 1,070.90.

The Kospi Index in South Korea decreased 7.98 or 0.57% to close at 1,391.17.SET index in Thailand closed lower 10.40 or 1.74% to 586.14 and JSE Index in Indonesia decreased 5.40 or 0.27% closed to 2,024.96. The Sensex index in India decreased 435.07 or 2.91% closed to 14,522.84.