Tokyo Market: Buybacks boost optimism
Sunday 24 May 1998
The Nikkei index gained 3.67 per cent last week after President Suharto of Indonesia resigned and hundreds of companies announced share buybacks.
The Nikkei closed at 15,801.65 and is likely to likely trade between 15,500 and 16,000, Mr Edwards said. Announcements by hundreds of companies that they would take advantage of new legislation to ask their shareholders to authorise share buybacks at the annual meetings in late June helped deflect attention from some uninspiring results.
"A lot of this is being masked by euphoria [in response to] changes in articles of association," said Paul Muller, a director at Schroders Japan.
On Friday, stocks were little changed after four days of gains. Citizen Watch rose on better-than-expected earnings results while Nissan Motor fell on the news that its credit rating might be cut on doubts that restructuring plans, announced last week, will be effective. Japan's second-largest automaker reported a group loss of Y14bn for the year to March.
Investors were encouraged by better-than-expected profit from a few companies including Citizen, Ricoh and Orix - all of which benefited from a weak yen and strong US market. Companies which announced plans to buy back and retire their shares posted gains, in some cases offsetting disappointment about earnings.
Bonds are likely to rise, pushing the benchmark yield down to new lows, on growing confidence that the central bank will lower short-term interest rates.
Most investors expect the central bank to lower its target for overnight rates - now just below a 0.5 per cent discount rate - by supplying more funds to the money market while leaving the record low discount rate untouched.
"We believe the BOJ will supply more funds to lower [short-term] rates," said Yasunori Kuroda, assistant manager at Yasuda Kasai Global Asset Management. "Bonds will get upward pressure and investors will have to buy even at lower yields.
Last week the benchmark government bond yield fell 5 basis points to 1.245 per cent, having reached a record low of 1.240 per cent on Tuesday.
Copyright: IOS & Bloomberg
The magicians using online collaboration to push boundaries
Jennifer Lawrence attacks mass media again over body image
Jennifer Lawrence: 'It should be illegal to call someone fat on TV'
Sun will 'flip upside down' within weeks, says Nasa
Ian Watkins: Police probed over earlier allegations as paedophile Lostprophets singer sentenced to 35 years for child sex offences
DNA from a 50,000 year old toe shows Neanderthals were highly inbred
Devyani Khobragade: India-US row escalates over arrest of diplomat in New York
- 1 America's 'virgin births'? One in 200 mothers 'became pregnant without having sex'
- 2 Sun will 'flip upside down' within weeks, says Nasa
- 4 Christmas comes early: Justin Bieber is 'retiring from music'
- 5 Children evacuated from swimming pool after prosthetic leg mistaken for paedophile
- < Previous
- Next >
iJobs Money & Business
£60000 - £75000 per annum + Bonus and Benefits: Harrington Starr: A leading au...
£25000 - £32000 per annum: Harrington Starr: Junior Business Analyst - Banking...
£25000 - £35000 per annum + benefits + bonus: Harrington Starr: Business Analy...
£50000 - £75000 per annum + benefits + bonus: Harrington Starr: Implementation...