Tokyo Market: Exporters fear rise in US interest rates
Sunday 30 May 1999
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."
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 35,000 walrus gather ashore on north-west Alaska beach 'for a rest'
- 5 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
Prince held a Facebook Q&A and this is the only question he answered
Brad Pitt, on the moment he completely lost his temper with Clint Eastwood's son
Cheryl Cole officially the 'most dangerous celebrity' on the internet
Ebola virus in the US: What are the symptoms, what is it and is there a cure?
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Benefits 'smart cards' plan revealed by Iain Duncan Smith to stop claimants spending welfare money on alcohol
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...