Sunday 14 February 1999
Gains may be limited by concern that companies will slash earnings projections before year-end book closing. After Friday's close, three steel makers - Kobe Steel, Sumitomo Metal Industries and NKK - widened their loss forecasts.
Japan's top 15 banks will probably get the Financial Reconstruction Commission's preliminary approval for about Y7,450bn (pounds 40bn) of public funds to be invested in preferred shares and other securities, government officials said.
"The FRC's moving ahead with confidence and that's good ... for the stability of the financial sector," said Sho Ikeda, the general manager of the investment research department at Nikko International Capital Management. "But it widens the gap between weak and strong banks; the latter will no doubt get a plum capital injection and will be able get rid of non-performing loans, and survive."
Banks with share prices over Y1,000 - Sumitomo, Bank of Tokyo-Mitsubishi and Sanwa Bank - will probably climb, he said. Japan's banks had Y73,000bn in problem loans on their books on 30 September. Dai-Ichi Kangyo Bank may gain if investors focus on the bank's move to cut 3,800 jobs by March 2003 and boost bad-loan write-offs to Y970bn, rather than the reversal of its earnings forecast from a Y15bn net profit to a Y450bn net loss.
The benchmark Nikkei 225 stock average rose for the fourth week in five, adding 0.54 for the week, to close at 13,973.69. Next week it will probably move between 13,800 and 14,500, Mr Ikeda said.
Market gains will be capped as the outlook for corporate earnings dims and companies cut forecasts. Market participants are bracing themselves for more cuts. "The market in Japan is very reactive to downward earnings revisions," said Garry Evans, a strategist at HSBC Securities.
With the yen strong and the fall in bond prices unlikely to weaken it in the near future, investors will continue to shift into domestic stocks, including "defensive" issues such as food and pharmaceuticals.
Mitsubishi Chemical, Japan's top chemicals company, was the Nikkei's biggest gainer for the week, climbing 18 per cent.
- 1 Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
- 2 Katie Hopkins and The Sun editor are reported to police for incitement to racial hatred following migrant boat column
- 3 Katie Hopkins has just written a piece so hateful that it might give Hitler pause – why was it published?
- 4 Australian student Tommy Connolly, 23, adopts his pregnant, homeless 17-year-old cousin to give her a chance at 'a better life'
- 5 Cancel Sky at your peril: man spends 96 minutes in chat but fails to get rid of service
Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
Katie Hopkins and The Sun editor are reported to police for incitement to racial hatred following migrant boat column
'Jihadi John': Isis executioner Mohammed Emwazi wanted to wage jihad in Somalia until his friends were betrayed and killed by al-Shabaab
Parma, Missouri: 80 per cent of town's police quit after first black mayor is elected
Australian student Tommy Connolly, 23, adopts his pregnant, homeless 17-year-old cousin to give her a chance at 'a better life'
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, int...