Finance Markets

July 11, 2006

Tokyo markets down on tech stocks

Filed under: Equities, Economy, Asia, Japan

Technology stocks helped send the Tokyo equities markets lower on Tuesday. The Nikkei 225 and the Topix index each lost 0.5 percent on the session, to 15,473.82 and 1,585.85 respectively.

The electronics sector was down on a strong yen and on declines in tech stocks in New York overnight. Sony dropped 0.2 percent to ¥5,040. Advantest declined by 0.9 percent to ¥12,020, while Matsushita was down to ¥2,350, 1.7 percent lower on the session.

Games developer Namco Bandai dropped 1.3 percent to ¥1,695 on the news that Zapf Creation has recommended that its shareholders reject Namco’s bid for the German dollmaker. Zapf is said to be looking for higher bids.

After Nikko Citigroup has withdrawn from its position as one of 15 underwriters for Japan Airlines’ new share issue, worth $1.9 billion, JAL’s shares declined by 2.6 percent to ¥271. The new issue will dilute existing shares by 30 to 40 percent and could be sold below current market prices in order to create adequate demand, making the issue controversial.

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July 10, 2006

Banks take Tokyo markets higher

Filed under: Equities, Economy, Asia, Japan

Equities markets in Tokyo were up substantially on Monday, with the Nikkei 225 up 1.6 percent to 15,552.81 and the Topix index 1.3 percent higher to 1,594.07.

In the technology sector, chip-making and testing equipment companies saw gains. Advantest was up 2.7 percent to ¥12,130, while Tokyo Electron gained 3.3 percent to ¥8,250.

Electronics companies were also up on the session, with Sony adding 1.2 percent to ¥5,050, Matsushita Electric Industrial up 1.5 percent to ¥2,390, and Canon advancing by 2.3 percent to ¥5,790.

Automobile manufacturers were mixed on currency concerns. Mazda and Toyota gained 1 percent to ¥777 and 1.2 percent to ¥6,050 respectively, while Nissan declined by 0.1 percent to ¥1,238.

The machinery sector was up 1.2 percent as a whole, with Komatsu adding 1.3 percent to ¥2,295. Industrial robots maker Fanuc, meanwhile, gained 4.7 percent to ¥10,120.

Banks benefited from the news that lending was up this month at a rate it hasn’t seen in five years. Mizuho advanced by 3.2 percent to ¥998,000 and Mitsubishi UFJ added 5.2 percent to ¥1,630,000. Also helping banks was the expectation that the Bank of Japan will bring an end to zero interest rates when it meets later this week.

Consumer finance companies saw losses during the session, again on interest rate issues, after the Liberal Democratic Party proposed new rules last week which would drop the maximum allowable interest rate on their loans from 29.2 percent to between 15 and 20 percent. Acom fell 1.8 percent to ¥5,870, while Promise dropped 2.5 percent to ¥5,500, Takefuji declined by 4 percent to ¥5,820, and Aiful was down 7.8 percent to ¥4,840.

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July 7, 2006

Bond yields fall on Friday; many remain up over week

Filed under: Bonds, Economy, US, Europe, UK, Japan

Yields on government bonds were down on Friday, but yields on several issues were higher for the week.

Bond prices in the United States benefited from new employment figures issued by the Department of Labor that showed 121,000 new jobs created in the US in June. This was up from the 92,000 new jobs that were created in May but much lower than the 200,000 new jobs that had been predicted for June in the wake of a private report issued Wednesday. That report, from payroll services company ADP had said that nearly 400,000 jobs had been created during the month. However, the hope that these numbers would help the US Federal Reserve to pause in its series of interest rate hikes was tempered by the report that wage inflation was up by its fastest rate since 2001.

In afternoon trade in New York, two-year Treasury bonds were down 3.4 basis points to a yield of 5.183 percent, still a gain of 2.1 basis points for the week. Meanwhile, ten-year bonds were 5.7 basis points lower to 5.128 percent, a drop of 1.7 percent during the week.

US news on employment also helped Eurozone bonds. The two-year Schatz dropped 3.3 basis points to 3.604 percent, still up 3 basis points on the week, while the ten-year Bund was down 6 basis points to yield 4.056 percent. The Bund remained up 0.2 basis points for the week.

In the UK, the two-year gilt dropped 4.7 basis points over the week to yield 4.171 percent, while the ten-year gilt was yielding 4.639 percent, a decline of 5.6 basis points during the week.

In Japan, the ten-year government bond was down on Friday as well, but at a yield of 1.960 percent was up 1 basis point on the week.

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July 5, 2006

Tokyo markets lower after missile tests

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were down on Wednesday after it was revealed that North Korea had test fired several missiles, but declines were moderate. Some analysts attributed the muted reaction to the tests to the relative strength of the markets, especially after Monday’s strong Tankan report and low unemployment figures from last week. The Nikkei 225 dropped 0.7 percent to 15,523.94 and the Topix index was down 0.8 percent to 1,589.97.

Japan Airlines had losses early in the day as investors feared that an uncertain political situation would make people afraid to fly, but by the end of the day JAL had gained back the losses to close even at ¥277.

The electronics sector saw declines based on fears of what the Korea situation would do to the global economy. Sony dropped 0.8 percent to ¥5,060, while Sharp lost 1.5 percent to ¥1,809 and Matsushita Electric Industrial was down 1.7 percent to ¥2,360.

Automobile manufacturers felt the brunt of investor nervousness more strongly. Toyota fell 1.2 percent to ¥5,940, while Nissan dropped 1.9 percent to ¥1,239 and Honda was down 2.2 percent to ¥3,600.

Companies that have defense-related manufacturing among their interests saw substantial gains. Howa Machinery, which makes firearms in addition to industrial machinery, gained 6.3 percent to ¥204, while Ishikawa Seisakusho, which makes defense equipment in addition to textile machinery, added 17.2 percent to ¥204. However Mitsubishi Heavy Industries, Japan’s biggest manufacturer of defense equipment, was up by only 0.4 percent to ¥496.

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Bond yields up on expected interest rate hikes

Filed under: Bonds, Economy, US, Europe, UK, Japan

Yields were up on government bonds on Wednesday as investors continued to expect interest rates to go up in a number of economies.

In the United States, a report that many more jobs than expected were created in June increased the expectation that the Fed will hike interest rates again in August. If Department of Labor Statistics numbers on Friday bear out today’s jobs numbers from the ADP, it could move analysts to rethink last week’s sentiment that the Fed might pause in its series of rate increases at its August meeting.

At mid-session in New York, the two-year Treasury bond had gained 7.1 basis points to a yield of 5.25 percent, while ten-year issues were yielding 5.235 percent, an increase of 8 basis points.

New data from the service sector in the Eurozone supported the consensus opinion that interest rates there will rise soon. Most analysts expect that when the European Central Bank meets on Thursday it will hold interest rates at their current level, but will signal that new rate hikes will come sooner rather than later.

The two-year Schatz was up 3.9 basis points to 3.603 percent, while the ten-year Bund added 3.1 basis points to a yield of 4.130 percent.

In the UK, meanwhile, the two-year gilt added 1.9 basis points to 4.775 percent, while the ten-year gilt was yielding 4.719 percent, a gain of 3.1 basis points.

Yields on Japanese government bonds were up as expectations grew that the Bank of Japan will end zero interest rates this month . Meanwhile, the furor over the Bank of Japan’s governor and his investment interests seemed to be abating. In addition, North Korea’s missile tests did not seem to have much of an impact on bonds activity.

The five-year Japanese government bond added 3.5 basis points to 1.560 percent, while the ten-year bond was up 0.5 basis points to a yield of 1.985 percent.

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July 4, 2006

Tokyo markets gain on exporters

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were up on Tuesday as concerns that the US will raise interest rates again soon retreated. Export-reliant stocks did better than domestic stocks even though new data has supported the idea that the Japanese economy continues to recover. The Nikkei 225 added 0.4 percent to 15,638.50, while the Topix index gained 0.6 percent to 1,602.43. It was the first time in nearly a month that the Topix managed to close above the 6,000 level.

Retailers continued to rally with evidence that summer shoppers were active. Aeon and Isetan each added 1.8 percent, to ¥2,615 and ¥2,035 respectively. Department store operator Mitsukoshi gained 2.5 percent to ¥569.

Consumer electronics makers saw gains on expectations that the US market would continue to be strong. Kyocera was up 1.4 percent to ¥9,010. Sony also added 1.4 percent, to ¥5,100. Digital camera maker Canon gained 3.4 percent to ¥5,740.

Automobile manufacturers were also up on the session. Nissan was up 0.5 percent to ¥1,263, while Toyota gained 0.8 percent to ¥6,010. Mazda added 5.2 percent to ¥768 on an upgrade from “neutral” to “buy” from Goldman Sachs.

Japan Airlines, meanwhile, recovered a bit of Monday’s losses when it gained 1.5 percent to ¥277.

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July 3, 2006

Nikkei, Topix gain on Tankan survey

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were up slightly on Monday after a new Tankan survey from the Bank of Japan showed that large companies are planning much larger levels of capital spending than they said they were in the last survey. The new numbers show that businesses are confident that the Japanese economic recovery will continue, and hinted that the Bank will abandon zero interest rates sooner rather than later.

The Nikkei 225 and the Topix index each added 0.4 percent, to 15,571.62 and 1,593.22 respectively.

The retail sector gained 1.2 percent as a whole. General retailer Aeon added 2.4 percent to ¥2,570, while department store chain Isetan gained 2.5 percent to ¥1,999. Another department store chain, Mitsukoshi, was up 6.1 percent to ¥555 after it announced strong operating profits for the quarter ending in May.

Miners saw advances as commodity prices rose once again. Mitsubishi Materials gained 3.1 percent to ¥503, while Sumitomo Metal Mining advanced by 5.4 percent to 1,572.

Japan Airlines dropped 4.9 percent to ¥273 after Friday’s news that it will have to sell new shares to update its fleet and cut debt.

Komatsu, the construction machinery maker, added 2.2 percent to ¥2,325.

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June 30, 2006

Wall Street leads Tokyo markets higher

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were up strongly on Friday after Thursday’s gains on Wall Street in the wake of another hike in US interest rates by the Federal Reserve. The Nikkei 225 and the Topix index each added 2.5 percent on the day to 15,505.18 and 1,586.96 respectively. Export-focused stocks were helped by expectations of higher demand in the United States, while domestic stocks also saw advances.

In the electronics sector, Advantest and Tokyo Electron each added 2.8 percent, to ¥11,660 and ¥8,000 respectively..

Construction machinery maker Komatsu gained 3.4 percent to ¥2,340. Industrial robot maker Fanuc was up 3.2 percent to ¥10,280.

Automobile manufacturers also saw gains. Toyota advanced by 4.2 percent to ¥5,990, while Nissan added 5 percent to ¥1,250 after declines earlier in the week. Mazda also gained 5 percent, to ¥717.

The banking and real estate sectors were also up on Friday. Chiba Bank gained 4.5 percent to ¥1,070, while Bank of Yokohama was up 6.6 percent to ¥885 and Mitsui Trust added ¥1,375.

In real estate, Mitsui Fudosan advanced by 4 percent to ¥2,485, Tokyo Tatemono added 4.1 percent to ¥1,226, and Daiwa House gained 5.8 percent to ¥1,830.

Among the losers on the day was department store chain Takashimaya, which was down 0.6 percent to ¥1,436 after it said its first quarter earnings had been lower than had been expected.

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June 28, 2006

Tokyo markets sharply lower

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were substantially lower on Wednesday as manufacturers felt the impact of rising prices for raw materials and as investors continued to worry about US interest rates. The Nikkei 225 was down 1.9 percent to 14,886.11, while the Topix index declined by 1.4 percent to 1,527.51.

Tiremaker Bridgestone dropped 4.3 percent to ¥2,140 after it said that rising raw materials prices were forcing it to cut its 2006-2007 profits forecast. Yokohama Rubber fell by 2.8 percent to ¥488, while Sumitomo Rubber declined by 4.4 percent to ¥1,208.

Chemical stocks were also hit by higher raw materials costs as the price of naphtha hit record highs in Asia. Nissan Chemical Industries was down 3.8 percent to ¥1,379, while Mitsui Chemicals declined by 6.8 percent to ¥704.

The export-focused automobile manufacturing sector saw losses as concerns continued about the state of the US economy. Toyota was down 1.9 percent to ¥5,700. Nissan dropped 2.3 percent to ¥1,183 after issuing warnings of poor domestic sales and rising materials costs, while Honda fell 2.5 percent to ¥3.530.

The securities sector was down 2.7 percent as a whole. Nomura declined by 3.1 percent to ¥2,035, while Nikko Cordial dropped 3.5 percent to ¥1,436 and Kabu.com fell 6.3 percent to ¥207,000.

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June 27, 2006

Government bond yields up in Europe, Japan

Filed under: Bonds, Economy, US, Europe, UK, Japan

Yields on US Treasury bonds were down on Tuesday as investors ignored healthy consumer sentiment and waited for the US Federal Reserve to make its decision on interest rates later this week. The gain in bond prices was strong enough to withstand dealer attempts to lower the price of two-year notes ahead of an auction of $22 billion in new issues scheduled for late in the day Tuesday. A sale of 5-year bonds was scheduled for Wednesday.

In late-morning trade in New York, two-year bonds had lost 2.1 basis points to 5.236 percent, while yields on ten-year bonds had dropped 3.3 basis points to 5.208 percent.

Eurozone bond yields were up as worries continued about the potential for the European Central Bank to raise interest rates again soon as comments by ECB officials tended to support that possibility. In addition, the Ifo index of German confidence was at 106.8 in June, the highest the index has been in 15 years, when it had been expected to fall from its revised May reading of 105.7.

Yields on the two-year Schatz were up by 3.3 percent in late afternoon trade, to 3.594 percent. The ten-year Bund gained 0.4 basis points to a yield of 4.090 percent.

Prices on UK gilts were up in late trade. The two-year gilt dropped 1.3 basis points to 4.834 percent, while the ten-year gilt was down by 0.1 basis point to yield 4.733 percent.

Amid increasing rumors that the governor of the Bank of Japan could resign, ten-year Japanese government bonds added 1 basis point to yield 1.910 percent.

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June 26, 2006

Nikkei, Topix slightly higher

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were a bit higher on Monday as good performance in the real estate sector outweighed fears in the consumer finance sector that new, more stringent rules may be imposed on such lenders. The Nikkei 225 and the Topix index each added 0.2 percent to 15,152.40 and 1,548.97 respectively. The only exception was the Mothers index of small and mid-cap stocks, which dropped 1.7 percent to 1,419.20.

The news that European steel company Arcelor has agreed to a revised bid from Mittal Steel helped the iron and steel sector was up 1.6 as a whole. JFE was up 1.3 percent to ¥4,580, while Nippon Steel gained 1.7 percent to ¥417 and Kobe Steel added 2.7 percent to ¥340.

The real estate sector gained 1.8 percent overall as it continued to benefit from higher commercial property rents in the cities. Mitsui Fudosan was up 1.9 percent to ¥2,400. Mitsubishi Estate and Tokyo Tatemono each added 2.8 percent, to ¥2,365 and ¥1,162, while Sumitomo Realty and Development advanced by 3 percent to ¥2,750 and NTT Urban Development gained 4.3 percent to ¥857,000.

Consumer finance companies saw losses on the day on reports that government regulators are considering strict rules to help borrowers avoid taking on more debt than they can afford. Acom dropped 1.4 percent to ¥6,170, Promise declined by 1.8 percent to ¥6,430, and Aiful was down by 1.8 percent to ¥5,770.

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June 23, 2006

Nikkei 225 drops 0.1 percent on day

Filed under: Equities, Economy, Asia, Japan

The prospect of higher interest rates in the United States sent the Tokyo equities markets lower on Friday, but declines were limited by gains in the real estate sector. The Nikkei 225 dropped 0.1 percent to 15,124.04, while the Topix index declined by 0.2 percent to 1,545.57.

Export-focused sectors were affected by concerns about the US economy, with the automobile manufacturing and consumer electronics sectors both lower. Among carmakers, Honda dropped 1.2 percent to ¥7,280 and Toyota was down 1.4 percent to ¥5,790. Meanwhile, among electronics companies, Sanyo Electric fell 3.2 percent to ¥243 after Finnish handset maker Nokia cancelled a joint venture with Sanyo before the project had even gotten underway.

Consumer finance company Takefuji dropped 0.9 percent to ¥6,810 after news reports that a committee of Japan’s ruling party has agreed to rules on lending that will lower the maximum interest rate borrowers can be charged.

The real estate sector added 1.7 percent as a whole, helped by data showing that rents in Japan’s largest cities are going up. Mitsui Fudosan added 3.1 percent to ¥2,355.

Also defying the general trend of losses was chemicals manufacturer Showa Denko which added 6.3 percent to ¥487 after it said it was increasing its recurring profit forecast for the full year by 6.5 percent.

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Bond yields up on interest rate concerns

Filed under: Bonds, Economy, US, Europe, UK, Japan

Yields on government bonds were up this week in the United States, the Eurozone, and in Japan. Investors’ main concerns revolved around the issue of interest rates.

In the United States, rumors began to circulate that the Federal Reserve will raise interest rates by 50 basis points rather than by the usual 25 basis points when it meets next week. Hard data was hard to come by, however, as officials of the Fed were observing a moratorium on comments that might provide hints about what they are planning to do. Some meat for speculation came when Barclays Capital said that it expects interest rates to be at 6 percent by the end of the year, rather than at the 5.5 percent currently expected by most analysts.

Yields on two-year treasury bonds were at 5.257 percent on Friday, a gain of 9 basis points over the week. Ten-year yields hit a four-year high at 5.218 percent, a gain of about 5 basis points.

In the Eurozone, the main talking point was speculation about when the European Central Bank will again raise interest rates. While the head of Bundesbank in Germany made comments implying that another rate hike was “warranted”, most analysts feel that such a move at the July meeting of the ECB is unlikely. The two-year Schatz gained 16 basis points on the week to 3.539 percent, while the ten-year Bund added 13 basis points to 4.074 percent.

Meanwhile, in the UK, ten-year gilts were up to a yield of 4.74 percent, a gain of 13 basis points.

In Japan, the ten-year government bond added 7 basis points during the week to a yield of 1.87 percent.

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June 22, 2006

Tokyo markets in significant gains

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were significantly higher on Thursday after new data showed that exports were up substantially in May. The Nikkei 225 added 3.4 percent to 15,135.69, while the Topix index was up 2.9 percent to 1,549.12. The gains came even though some are calling for the resignation of the governor of the Bank of Japan after he invested in a fund created by shareholder activist Yoshiaki Murakami, who was recently put under arrest.

Shares in companies dependent on commodities were up, with Mitsui Mining and Smelting adding 5.8 percent to ¥675 and Sumitomo Metal Mining rising by 6.3 percent to ¥1,352.

Electronics-related companies were up substantially as well. Both printer and camera maker Canon and consumer electronics and entertainment giant Sony added 3.6 percent on the day, to ¥8,000 and ¥4,940 respectively. Sharp gained 4.5 percent to ¥1,767, while Sanyo Electric was up 4.6 percent to ¥251 and Kyocera rose by the same percentage to ¥8,940. Tokyo Electron advanced by 5.9 percent to ¥7,760. Casio Computer added 7.2 percent to ¥2,030.

The securities sector, meanwhile, was up by 4.8 percent as a whole. Nomura gained 4.7 percent to ¥2,135, while Mitsubishi UFJ Securities was up 5 percent to ¥1,459. Daiwa Securities was up 5.1 percent to ¥1,459. Nikko Cordial advanced by 5.9 percent to ¥1,543.

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June 20, 2006

Nikkei, Topix lower on commodity-related stocks

Filed under: Equities, Economy, Japan

Declines in stocks related to commodities sent the Tokyo equities markets lower on Tuesday. The Nikkei 225 dropped 1.4 percent to 14,648.41, while the Topix index declined by 1.1 percent to 1,510.32. The Mother’s index of small and mid-cap stocks was also down, by 2.1 percent.

Transport-related stocks were down on the day. Japan’s largest airline, JAL, lost 2 percent to ¥299 on news of a possible strike on Wednesday that could disrupt flight schedules. Railways were down as well. Hankyu lost 4 percent to ¥535 after it said it had paid more than it intended to for Hanshin Electric Railway, which was down 5.4 percent to ¥848.

Commodities-related stocks fell as concerns continued about the state of the US economy as well as in reaction to Monday’s news that China’s central bank has begun a program to decrease lending, which could see demand for commodities there decline. Sumitomo Metal Mining lost 4.5 percent to ¥1,253, while Mitsui Mining & Smelting dropped 3.8 percent to ¥638.

Falling crude oil prices sent shares in oil-related companies lower. Nippon Oil declined by 0.9 percent to ¥799, while refiner and distributor Cosmo was down 2 percent to ¥502 and Inpex fell 3 percent to ¥890,000.

Glassmakers were also lower on the day. Asahi Glass, Japan’ largest, was down 2.3 percent to ¥1,417, while Nippon Sheet Glass dropped 4.1 percent to ¥615 as investors showed their displeasure that it now owns UK glassmaker Pilkington.

Advances were seen in the pharmaceutical sector, where Daiichi Sankyo added 1.4 percent to ¥2,930, as well as in restaurants, where Yoshinoya D&C added 2.2 percent to ¥229,000 on the prospect that US beef imports might resume soon.

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June 19, 2006

China announcement sends Tokyo equities lower

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were lower on Monday as export-reliant sectors saw declines on the news that China’s central bank is cutting back on lending. The announcement spurred worries that China’s economy is slowing down. The Topix index was also hurt by declines in the banking sector.

The Nikkei 225 was 0.1 percent lower to 14,860.35, while the Topix dropped 0.5 percent to 1,527.66. Meanwhile, the Mothers index of small and mid-cap stocks closed flat at 1,462.71.

Among companies hit by the news from China were smelter Mitsubishi Materials, which dropped 3 percent to ¥458 and construction machinery manufacturer Komatsu, down 3.5 percent to ¥2,075.

The electrical machinery sector dropped 0.5 percent as a sector. Among electronics companies, Hitachi was down 1.1 percent to ¥743, while Sony dropped 1.6 percent to ¥4,860. In the semiconductor sector, Advantest lost 2.6 percent to ¥10,750.

Among banks, Mizuho lost 1.9 percent to ¥875,000, while Mitsubishi UFJ declined by 2 percent to ¥1,460,000.

Pharmaceuticals and seafood companies, however, saw gains on the day. Strong export sales in the seafood sector saw Nippon Suisan add 3.1 percent to ¥589 and Maruha gain 3.5 percent to ¥325.

The pharmaceuticals sector was up 2.3 percent as a whole. Takeda added 1.7 percent to ¥6,730, Chugai was up 3.4 percent to ¥2,280, and Daiichi Sankyo gained 6.1 percent to ¥2,890.

Ishikawa Seisakusho, which manufactures defence products in addition to textiles, added 17.7 percent on the day to ¥166 as suspicions rose that North Korea is preparing to test a missile in the near future.

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Scant news sends bond yields higher

Filed under: Bonds, Economy, US, Europe, UK, Japan

Yields on government bonds were up in global economies on Monday as a lack of substantive economic news caused investors to be cautious about their activities in the current climate of higher interest rates.

With August Fed futures indicating a 75 percent probability that the US Federal Reserve will raise interest rates again on August 8 and a near-certainty that rates will be raised this month as well, yields on US Treasury bonds were up. Ten-year issues added 1.8 basis points to a yield of 5.153 percent, while both two-year and thirty-year bonds were yielding 5.194 percent. Two-year paper was up 2.6 basis points, while thirty-year bonds gained 2.1 basis points.

Comments from a European Central Bank official that hinted at another rate hike soon in the Eurozone and a stronger equities market both sent bond yields higher in the region. The two-year Schatz added 4.6 basis points to 3.421 percent, while the ten-year Bund was yielding 3.971 percent, a gain of 2.2 basis points.

A stronger equities market and the lack of economic news in the UK also sent gilt yields higher, as did anticipation of Wednesday’s release of the minutes of the most recent meeting of the Bank of England’s monetary policy committee. Two-year gilts added 1.8 basis points to 4.787 percent and ten-year gilts gained 5.4 basis pints to a yield of 4.665 percent.

In Japan, the 10-year government bond gained 2 basis points to yield 1.825 percent. There is speculation that interest rates will rise above zero when the Bank of Japan meets in July, since equities markets in Japan seem to have stabilized after recent declines.

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June 16, 2006

Tokyo equities markets gain on day

Filed under: Equities, Economy, Asia, Japan

Equities markets in Tokyo saw substantial gains on Friday in both domestic and export-focused sectors. The Nikkei 225 ended the day 2.8 percent higher at 14,879.34, while the Topix index added 3.3 percent to 1,534.71.

The steel sector added 4.7 percent as a whole on increased demand around the world. Nippon Steel was up 3.9 percent to ¥405, while Kobe Steel and Sumitomo Metal Mining each advanced by 4.6 percent to ¥339 and ¥1,330 respectively.

Banks were up 4.3 percent as a sector on the expectation that interest rates will rise in July. Mitsubishi UFJ gained 4.2 percent to ¥1,490,000, while Mizuho Financial advanced by 4.9 percent to ¥892,000.

Mitsui Fudosan was up 3.9 percent to ¥2,295 and Daiwa House added 5.1 percent to ¥1,773 as the real estate sector as a whole added 4.1 percent.

Retail saw gains as well. Seven & I advanced by 2.2 percent to ¥3,710, while Aeon gained 4.4 percent to ¥2,500.

The pharmaceuticals sector was up, but only by 0.8 percent and results were mixed for companies within the sector. Astellas Pharmaceuticals added 1 percent to ¥4,020, but Chugai and Daiichi Sankyo lost share value, by 0.9 percent to ¥2,205 and by 2 percent to ¥2,725 respectively.

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June 15, 2006

Bond yields up on interest rate expectations

Filed under: Bonds, Economy, US, Europe, UK, Japan

Yields on government bonds were up in most major markets on Thursday as the likelihood increased that the US Federal Reserve would raise interest rates later in the month. In addition to a hike this month, analysts are increasingly convinced that there will also be a rate hike at the Fed’s August meeting.

At mid-day in New York, two-year Treasury bonds added 2.6 basis points to 5.146 percent, nearly a five-year high, while yields on ten-year notes were up 3 basis points to 5.100 percent.

In the Eurozone, inflation concerns affected bond yields. The two-year Schatz was yielding 3.392 percent late in the trading day, a gain of 3.7 basis points. Meanwhile, the ten-year Bund was 4.4 basis points higher to a yield of 3.948 percent.

UK gilts saw yields rise, as well. Two-year yields were up 4.2 basis points to 4.733 percent, while the yield on ten-year gilds were at 4.622 percent, a rise of 8.9 basis points. New data showed that retail sales there is up more than had been expected and prices on new houses are rising faster than they have in two years.

In Japan, yields on the ten-year government bond stood firm at 1.770 percent as there was essentially no reaction to the Bank of Japan’s expected decision to keep interest rates at zero for the time being.

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June 14, 2006

Tokyo markets rise slightly

Filed under: Equities, Economy, Asia, Japan

Tokyo equities markets were up on Wednesday despite early losses. The Nikkei 225, which was down by over 4 percent on Tuesday, added 0.6 percent to 14,309.56, while the Topix index gained 0.5 percent to 1,466.14. Meanwhile, the Mothers index of small and mid-cap stocks was up 3.7 percent to 1,394.09.

The transport equipment sector added 0.9 percent as a whole. Honda was up 0.7 percent to ¥6,790, while Toyota gained 1.1 percent to ¥5,590 and Mazda advanced by 2.5 percent to ¥618.

An expected decline in rubber prices spurred Goldman Sachs to recommend both Sumitomo Rubber, which it just began covering, and tyre maker Bridgestone. Sumitomo Rubber added 8.2 percent to ¥1,271, while Bridgestone advanced by 1.1 percent to ¥2,190.

Another export-focused sector, electronics, gained 0.6 percent on the day. Mitsubishi Electric added 1 percent to ¥844, while Matsushita Electric Industrial was up 1.4 percent to ¥2,245.

Retailers were up 0.5 percent on the day as a sector, with Aeon advancing by 3.7 percent on the day after recent losses.

In the telecommunications sector, KDDI dropped 1.2 percent to ¥661,000 after it said that personal information on approximately 4 million customers had been disclosed.

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