Banks in Japan Fall on Regulator Comments

123jump.com Staff
16 Sep, 2009
New York City

Stocks in Japan lost early momentum after global markets edged higher. Banks fell sharply after the new nominee of FSA chief indicated his desire to seek loan moratorium for small and mid-sized businesses. Exporters gained and yen strengthened against dollar.

[R]8:00 AM Tokyo – Stocks in Japan lost early momentum after global markets edged higher. Banks fell sharply after the new nominee of FSA chief indicated his desire to seek loan moratorium for small and mid-sized businesses. Exporters gained and yen strengthened against dollar.[/R]

Stocks in Tokyo opened higher in the early trading as U.S. economic data indicated positive environment but quickly lost the momentum after the comments from the soon to be appointed new chief of Financial Services Agency.

Investors were also nervous after recently elected Prime Minister Yukio Hatoyama assumed the office. The new administration favors direct distribution of cash to consumers and eliminating wasteful construction projects and lowering highway tolls. The prime minister also stressed the need to move away from the historic precedent of decision making that relies on bureaucrats.

Ahead of the upcoming five-day holiday period at the end of this week, trading volume was weak and financials led the decliners.

The Nikkei 225 Index in Tokyo closed higher 53.15 or 0.52% to 10,270.77. At close in New York dollar edged lower against the yen, pound and euro.

Gainers & Losers

In the overnight trading exporters and autos companies gained but banks declined.

Shizuka Kamei, the newly appointed FSA chief said that he will be discussing with banks to offer a loan moratorium to small and mid size companies for as long as three years. The talks of moratorium quickly dragged banking stocks lower.

Mitsubishi UFJ declined 1.7% to 526 yen, Mizuho fell 1.5% to 195 yen and Sumitomo Trust & Banking dropped 4.2% to 486 yen.

Toyota Motor decreased 0.8% to 3,720 yen, Nissan Motor increased 2.6% to 593 yen and Honda Motor gained 0.5% to 2,810 yen.

Nippon Yusen declined 1.6% to 379 yen and Kawasaki Kisen decreased 0.8% to 385 yen.

Canon increased 4.2% to 3,700 yen, Citizen Holdings increased 1.2% to 521 yen and Sony Corp advanced 2.2%% to 2,475 yen.

Nikkei 200 Average Movers

The Sumitomo Trust and Banking Company, Limited the decliners in the Nikkei 225 index of 4.1% followed by losses in J Front Retailing Co Ltd. of 3.4%, in Fukuoka Financial Group Inc of 3.2 %, in Yahoo Japan Corporation of 3.2% and in Mizuho Trust & Banking Co Ltd of 2.9%.

Mitsui Chemicals, Inc. led gainers in the Nikkei 225 index with a rise of 7.5 % followed by gains in Canon Inc of 4.2%, in Okuma Corp of 4.1% and in Showa Denko KK of 4.0%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 53.15 or 0.52% to 10,270.77, Hang Seng index in Hong Kong increased 536.55or 2.57% to 21,402.92 and CSI 300 index in China lower 44.41or 1.34% to 3,258.24 ASX 200 index in Australia increased 110.10 or 2.42% to 4,650.40. The FTSE Bursa KL Composite index in Malaysia closed higher 5.51 or 0.46% to 1,212.98.

The Kospi Index in South Korea increased 29.93 or 1.81% to close at 1,683.33. SET index in Thailand closed higher 7.09 or 1.01% to 710.25 and JSE Index in Indonesia increased 19.25 or 0.80% to 2,439.36. The Sensex index in India increased 222.59 or 1.35% to 16,677.04.