International Markets: Tokyo - Bank stocks under the hammer

JAPANESE bonds may rise this week as investors bet that government action to boost the economy, including a plan to support banks through the purchase of preferred shares, will be delayed. Stocks are likely to be little changed as investors buy leading exporters and sell companies that rely heavily on domestic demand.

The passage of a 30,000bn yen ($239bn) government bailout for banks has been delayed by opposition party demands that the package be debated separately from other bills.

A delay in the plan to shore up the financial industry is favourable for bonds, said Akitsugu Bando, portfolio manager at Okasan Capital Management. In the week just ended the yield on the benchmark government bond fell 4 basis points to 1.765 per cent.

Hikaru Matsunaga, chairman of Japan's lower house budget committee, will take over as finance minister from Hiroshi Mitsuzuka, who resigned Wednesday because of a bribery scandal involving ministry bank inspectors.

While Mr Matsunaga's selection gave the market comfort, the delay to the bank bailout will unsettle equities. The benchmark Nikkei 225 index may fluctuate between 16,500 and 17,000 next week, said one analyst: last week it fell by 160.64, or 0.96 per cent, to 16,789.11.

Bank stocks are likely to take a further beating following the scandal at the finance ministry, in which two ministry inspectors were arrested for accepting bribes from four of the banks they were charged to regulate. Financial shares may be further hurt by a report in the Nihon Keizai newspaper alleging that the finance ministry advised failed Yamaichi Securities to hide trading losses. Japan's new vice-finance minister Koji Tanami denied the report, but questions are being raised that the banks may not have fully disclosed all their bad loans.

Investors who bought into banks, builders and the other industries which rose as much as 40 per cent in the last two weeks will probably sell for the relative safety of top exporters.

Construction firms and materials makers, which had risen on optimism over the government economic stimulus, fell on Friday as investors decided that their prices looked higher than their profit outlook. Builders have been hit by declines in housing and construction starts as consumers hold back on spending after last year's 2 per cent income tax increase. Steel and materials makers have also been by hit by lower spending and the fall of Asian currencies.

Copyright: IOS & Bloomberg

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...