Tokyo Market: Exporters fear rise in US interest rates

JAPAN'S benchmark stock average could fall this week to 15,500, as the possibility of a slowdown in the US economy threatens sales of Japanese firms that export there.

Exporters such as Sony and Toyota may fall on concern that US economic growth could trigger a rise in interest rates. Both rely on the US for more than a third of sales. "The key question for global equity markets, including Japan, is what will happen to the US markets," said Chua Soon Hock, strategist at Sanwa Bank.

The Nikkei closed below 16,000 on Friday for the first time since March, ending at 15,972.68, down 2 per cent for the week.

Exporters could also fall because of a decline in the value of the dollar, which has sunk 2.1 per cent in the last five days against the yen.

Other companies that could move include those which reported earnings late on Friday. Sega Enterprises said it could post its third straight loss next year. It made its worst-ever loss this year as it wrote off inventory, its arcade business slumped and the Dreamcast home console made a lacklustre debut.

Government bonds are likely to fall as unemployment stirs investor concern that the government will sell more debt to fund spending to tackle the problem. Finance minister Kiichi Miyazawa said the government will spend "whatever's necessary" to boost employment. The jobless rate will probably reach a post-war high of 4.9 per cent in April, up from 4.8 per cent in March.

"I'm seeing a weak demand for long-term bonds because people are concerned about additional budgets," said Yasunori Kuroda, a fund manager at Yasuda Kasai Global Asset Management.

Last week, the benchmark government bond yield rose 11 basis points to 1.460 per cent. "The recent bull trend has pretty much finished," said Xinyi Lu at Paribas Capital Markets. "Talk of a supplementary budget will get more serious." City banks have been sellers over the past few days.

Even so, some investors are still looking for an opportunity to buy when bonds decline on the hunch that the government won't draft a large supplementary budget. They expect the Bank of Japan to arrest any rise in long-term interest rates by continuing to provide ample funds to the banking system. "Yields near 1.6 per cent look like a good level to buy," said Masahiro Kami, chief fund manager at SB Investment Management. "As long as short- term rates are low, long-term yields won't jump."

PROMOTED VIDEO
News
Wayne’s estate faces a claim for alleged copyright breaches
John Wayne's heirs duke it out with university over use of the late film star's nickname
News
peopleIndian actress known as the 'Grand Old Lady of Bollywood' was 102
News
business
News
Mick Jagger performing at Glastonbury
people
Extras
indybest
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
Sport
Germany's Andre Greipel crosses the finish line to win the sixth stage of the Tour de France cycling race over 194 kilometers (120.5 miles) with start in Arras and finish in Reims, France
tour de franceGerman champion achieves sixth Tour stage win in Reims
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Project Manager - ETRM/CTRM

£70000 - £90000 per annum + Job Satisfaction: Harrington Starr: Project Manage...

JQuery Developer (JQuery, C#, front-end, JQuery, UI, Tomcat)

£40000 - £45000 per annum: Harrington Starr: A Global Financial Service Organ...

Linux Systems Administrator - UNIX, Linux, Shell, Bash

£50000 - £60000 per annum: Harrington Starr: Linux Systems Administrator - UNI...

Day In a Page

The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

Hollywood targets Asian audiences

The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

Grindr founder Joel Simkhai: 'I've found love on my dating app'

Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

Is it time to ditch autocorrect?

Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
10 best girls' summer dresses

Frock chick: 10 best girls' summer dresses

Get them ready for the holidays with these cool and pretty options 
Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

Westminster’s dark secret

Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

A History of the First World War in 100 Moments

Dulce et decorum est: a life cut short for a poet whose work achieved immortality
Google tells popular music website to censor album cover art in 'sexually explicit content' ban

Naked censorship?

The strange case of Google, the music website and the nudity take-down requests
Howzat! 8 best cricket bats

Howzat! 8 best cricket bats

As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

David Luiz falls from leader figure to symbol of national humiliation

Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil