Japanese Stocks Rise as Europe's Debt Concerns Ease, Oil Climbs
Japanese stocks rose for a second day after Deutsche Bundesbank President Axel Weber said a rescue fund for the euro area has sufficient capital to calm financial markets and as oil and metal prices increased.
Toyota Motor Corp., the world's biggest carmaker, advanced 0.8 percent. Honda Motor Co., Japan's No. 2 carmaker, climbed 1.1 percent. Mitsubishi Corp., the nation's largest commodities trader, gained 0.4 percent. Sumitomo Chemical Co. jumped 3.1 percent after announcing a plan to build a rubber plant.
"Concerns about financial issues in Europe eased and there's expectation for excess liquidity," said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc.
The Nikkei 225 Stock Average rose 0.4 percent to 10,118.49 as of 9:42 a.m. in Tokyo, set for the highest close since June 21. The broader Topix index increased 0.4 percent to 872.97, with about five stocks gaining for every two that fell. For the week, the Nikkei has advanced 1 percent, while the Topix is up 0.4 percent.
The Nikkei 225 jumped 9.5 percent this month to yesterday. Stocks in the Japanese benchmark are valued at 17.8 times estimated earnings on average, compared with 14.1 times for the Standard &Poor's 500 Index and 12 times for the Stoxx Europe 600 Index.
The benchmark Stoxx 600 rose 0.5 percent yesterday after Weber, who is also a European Central Bank Governing Council member, said there's no alternative to the European currency union.
Yen Weakens
Toyota gained 0.8 percent to 3,330 yen and Honda increased 1.1 percent to 3,120 yen. The carmakers were the biggest support for the Topix's gain. TDK Corp., the world's biggest maker of magnetic heads for disk drives, jumped 2.2 percent to 5,660 yen.
The yen depreciated to 83.73 against the dollar, compared with 83.49 at the close of stock trading in Tokyo yesterday. Against the euro, Japan's currency weakened to 111.75 from 111.25. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.
Mitsubishi gained 0.4 percent to 2,137 yen and Mitsui & Co., which counts commodities as its largest source of profit, rose 0.4 percent to 1,340 yen.
The London Metal Exchange Index of prices for six industrial metals including copper and aluminum advanced 1.4 percent yesterday. Crude oil for January delivery gained as much as 0.8 percent yesterday in electronic trading in New York to $84.53 a barrel, the highest price since Nov. 16.
Sumitomo Chemical climbed 3.1 percent to 371 yen, the most in the Nikkei 225. The company said on its Web site it will build a plant in Singapore to produce solution styrene-butadiene rubber, aiming to start commercial operation in the fourth quarter of 2013.
Japan Airport Terminal Co., the operator of buildings at Tokyo's Haneda Airport, advanced 1.9 percent to 1,317 yen after the company had its rating raised to "outperform" from "neutral" at Mitsubishi UFJ Morgan Stanley Securities Co.
Thursday, November 25, 2010
US Stock Market Rallied Ahead Of Thanksgiving
The US equities and bonds markets bounced back yesterday following the release of several encouraging economic reports. The rally in the markets occurred a day after a sell-off occurred due to the recent military conflict between North and South Korea. Traders initially found confidence when Germany’s business climate, as measured in the German Ifo business climate index, unexpectedly improved with the index rising to to 109.3 from 107.7. The index was initially seen to weaken to 107.6. Of course, this surprise came amid the current drama in Ireland which I will talk about in my next article so watch out for that!
Later, the buying gained more momentum when the latest initial jobless claims, which is the number of people who are applying for unemployment benefits from the state for the first time, in the US registered a much lower figure of 407,000 than the market’s 434,000 forecast. The previous week’s count was at 441,000. The market actually more weight on the improvement in the jobless claims versus the country’s durable goods orders which fell by 3.3% in October.
Earlier in the week, data showed that the US economy grew by 2.5% against the 2.0% estimate during the third quarter due to higher consumption which can partially attributed to the gains in employee wages. Given these, its apparent the US economy is slowly picking up speed.
To the end of the day, the Dow jumped by 1.31% while the broader S&P 500 soared by 1.93%. The Nasdaq, similarly, gained by 1.43% while the yield on the 10-year bond in the US closed higher by 0.1520 points to 2.9140%.
The US equities and bonds markets bounced back yesterday following the release of several encouraging economic reports. The rally in the markets occurred a day after a sell-off occurred due to the recent military conflict between North and South Korea. Traders initially found confidence when Germany’s business climate, as measured in the German Ifo business climate index, unexpectedly improved with the index rising to to 109.3 from 107.7. The index was initially seen to weaken to 107.6. Of course, this surprise came amid the current drama in Ireland which I will talk about in my next article so watch out for that!
Later, the buying gained more momentum when the latest initial jobless claims, which is the number of people who are applying for unemployment benefits from the state for the first time, in the US registered a much lower figure of 407,000 than the market’s 434,000 forecast. The previous week’s count was at 441,000. The market actually more weight on the improvement in the jobless claims versus the country’s durable goods orders which fell by 3.3% in October.
Earlier in the week, data showed that the US economy grew by 2.5% against the 2.0% estimate during the third quarter due to higher consumption which can partially attributed to the gains in employee wages. Given these, its apparent the US economy is slowly picking up speed.
To the end of the day, the Dow jumped by 1.31% while the broader S&P 500 soared by 1.93%. The Nasdaq, similarly, gained by 1.43% while the yield on the 10-year bond in the US closed higher by 0.1520 points to 2.9140%.
Sunday, June 6, 2010
Japan’s Bond Futures Rise as Stock Losses Boost Safety Demand
Japan’s bond futures rose as local stocks extended losses in U.S. equities, boosting demand for the relative safety of debt.
U.S. stocks fell on BP Plc’s failure to plug a leaking oil rig in the Gulf of Mexico and a report that said Lebanon fired on Israeli warplanes. Japan’s bonds may also advance on prospects 10-year yields at the highest level in more than a week will boost demand. NHK television reported Prime Minister Yukio Hatoyama will resign.
“Bonds will remain sensitive to external risk factors,” said Akio Kato, team leader of Japanese debt at Kokusai Asset Management Co. in Tokyo, which runs the $38.7 billion Global Sovereign Open fund. “As risk aversion lingers in markets, investors are buying JGBs.”
Ten-year bond futures for June delivery gained 0.08 to 140.51 at the Tokyo Stock Exchange as of 10:01 a.m. local time.
The yield on the 1.3 percent bond due June 2020 held at 1.275 percent at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The yield was the highest since May 20. A basis point is 0.01 percentage point.
Ten-year yields may fall to 1.2 percent by the end of this month, according to Kokusai’s Kato. Should his forecast prove accurate, investors who buy the securities today will make a 0.7 percent return, Bloomberg calculations show.
The Nikkei 225 Stock Average fell 0.7 percent and the broader Topix index declined 0.8 percent. The Standard & Poor’s 500 Index dropped 1.7 percent after Agence France-Presse reported that a senior Israeli security official said the nation’s planes were targeted by Lebanese anti-aircraft guns.
The yen weakened after NHK Television reported, without saying where it got the information, that Hatoyama told leaders of the ruling Democratic Party of Japan that he will resign.
“Political uncertainty is deepening,” Shinji Nomura, chief debt strategist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest banking group, wrote in a note today. “Investors are beginning to recognize immediate risks such as a delay in policy making, which should cap demand for bonds.”
Japan’s bond futures rose as local stocks extended losses in U.S. equities, boosting demand for the relative safety of debt.
U.S. stocks fell on BP Plc’s failure to plug a leaking oil rig in the Gulf of Mexico and a report that said Lebanon fired on Israeli warplanes. Japan’s bonds may also advance on prospects 10-year yields at the highest level in more than a week will boost demand. NHK television reported Prime Minister Yukio Hatoyama will resign.
“Bonds will remain sensitive to external risk factors,” said Akio Kato, team leader of Japanese debt at Kokusai Asset Management Co. in Tokyo, which runs the $38.7 billion Global Sovereign Open fund. “As risk aversion lingers in markets, investors are buying JGBs.”
Ten-year bond futures for June delivery gained 0.08 to 140.51 at the Tokyo Stock Exchange as of 10:01 a.m. local time.
The yield on the 1.3 percent bond due June 2020 held at 1.275 percent at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The yield was the highest since May 20. A basis point is 0.01 percentage point.
Ten-year yields may fall to 1.2 percent by the end of this month, according to Kokusai’s Kato. Should his forecast prove accurate, investors who buy the securities today will make a 0.7 percent return, Bloomberg calculations show.
The Nikkei 225 Stock Average fell 0.7 percent and the broader Topix index declined 0.8 percent. The Standard & Poor’s 500 Index dropped 1.7 percent after Agence France-Presse reported that a senior Israeli security official said the nation’s planes were targeted by Lebanese anti-aircraft guns.
The yen weakened after NHK Television reported, without saying where it got the information, that Hatoyama told leaders of the ruling Democratic Party of Japan that he will resign.
“Political uncertainty is deepening,” Shinji Nomura, chief debt strategist in Tokyo at Nikko Cordial Securities Inc., a unit of Japan’s third-largest banking group, wrote in a note today. “Investors are beginning to recognize immediate risks such as a delay in policy making, which should cap demand for bonds.”
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