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
- 1 Windows 10: man updates PC, wakes up to find porn slideshow on repeat
- 2 The 'world's most beautiful vagina' has been debunked by science
- 3 John Green schools morning show hosts after awkward interview with Cara Delevingne
- 4 Supermodel Gisele Bundchen mocked for wearing a burka to avoid being seen visiting plastic surgeon in Paris
- 5 Bulletproof armadillo puts Texas man in hospital after shot bounces off hard shell
Whoopi Goldberg tells Cara Delevingne to suck it up: 'She's not famous. I'M famous'
John Green schools morning show hosts after awkward interview with Cara Delevingne
Supermodel Gisele Bundchen mocked for wearing a burka to avoid being seen visiting plastic surgeon in Paris
Bulletproof armadillo puts Texas man in hospital after shot bounces off hard shell
'Rowdy' Roddy Piper dies: Wrestling legend dies aged 61, according to reports
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
Labour leadership contender Jeremy Corbyn says 'we can learn a great deal from Karl Marx'
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Public anger after French sunbather beaten up by gang for wearing a bikini in Reims park
Labour leadership: New poll shows party is now even 'less electable' than under Ed Miliband
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...
£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...
£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...
£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...