Yen Direction Worries Stock Investors in Japan

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

Japan stocks are likely to trade weak as the yen hovers near its high for the year. Consumer price index decreased in August from a year ago. The comment from Finance Minister on strong yen policy failed to sway the market sentiment. Tokyo Motor Show is scheduled to open with record low exhibitors.

[R]7:30 AM Tokyo – Japan stocks are likely to trade weak as the yen hovers near its high for the year. Consumer price index decreased in August from a year ago. Finance Minister’s comment regarding strong yen policy failed to sway the market sentiment.[/R]

Tokyo stocks are expected to trade weak as international markets traded sideways after rising on the merger wave. Investors are focused on dollar/yen exchange rate as yen trades at eight month high.

The Nikkei 225 Index in Tokyo closed higher 90.68 or 0.91% to 10,100.20 and the yen closed at 90.10 against one dollar.

Finance Minister Hirohisa Fuji clarified his stance on the intervention policy at a gathering in Tokyo. He stressed that he never said he favored “strong yen” policy and does not prefer to intervene in the marketplace. His comments suggested that he will let market dictate the value of the currency but the yen after falling briefly edged right back up.

Tokyo Motor Show scheduled to open on October 23 with record low 108 exhibitors according to the automobile trade association organizing the show.

The Statistics Bureau reported that August consumer prices decreased 2.4% compared to a year after excluding fresh food prices. The price index increased 0.3% from July and decreased 2.2% from a year ago. After the report consumer products related and retailing companies decreased.

Gainers & Losers

Osaka based Panasonic received conditional approval from the EU to acquire Sanyo Electric Co as the consolidation in the consumer electronics continues. The European Union asked the electronics giant to divest certain battery operation but will permit the merger of its cell phone battery and Sanyo’s solar panel operations.

Panasonic Corp decreased 1.5% to 1,315 yen and Sanyo Electric increased 1.4% to 221 yen.

Export sensitive stocks declined as the yen stays firm. The yen is likely to test the highs near 87 it reached in 2007.

Nikkei English News reported that three insurance companies are likely to merge. Mitsui Sumitomo Insurance Group Holdings Inc, Nissay Dowa General Insurance Co and Aioi Insurance Co. are expected to merge into a holding company.

The combined companies expect to save 50 billion yen by fiscal 2014 and appoint Mitsui Sumitomo President Toshiaki Egashira as the company president.

Financials and brokerage companies increased. Nomura added 4.4% to 564 yen and

Nitori declined 4.2% to 7,540 yen after consumer prices declined and show no signs of advancing. J Front Retailing increased 0.6% to 516 yen and Isetan Mitsukoshi added 0.3% to 1,048 yen. Nippon Meat Packers Inc increased 2.6% to 1,126 yen.

Nippon Soda and Japan Tobacco declined more than 3%.

Nikkei 200 Average Movers

Showa Denko K.K. led the decliners in the Nikkei 225 index of 5.4% followed by losses in Casio Computer Co., Ltd. of 4.7%, in West Japan Railway Company of 4.7 %, in Taiheiyo Cement Corporation of 4.0% and in East Japan Railway Company of 3.1%.

JGC Corporation led gainers in the Nikkei 225 index with a rise of 6.5% followed by gains Kobe Steel, Ltd. of 5.3%, in Panasonic Electric Works Co of 4.9% and in Nomura Holdings, Inc of 4.4%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 90.68 or 0.91% to 10,100.20, Hang Seng index in Hong Kong increased 424.76 or 2.06% to 21,013.17 and CSI 300 index in China lower 0.36 or 0.01% to 2,972.29. ASX 200 index in Australia increased 75.70 or 1.62% to 4,753.10. The FTSE Bursa KL Composite index in Malaysia was higher 2.26 or 0.19% to 1208.21.

The Kospi Index in South Korea increased 14.50 or 0.87% to close at 1,690.05. SET index in Thailand closed higher 6.41 or 0.90% to 715.29. JSE Index in Indonesia increased 46.00 or 1.92% to 2,443.83. The Sensex index in India increased 159.91 or 0.96% to 16,852.91.