Tokyo Market: Exporters lead drop as yen strengthens
Sunday 08 August 1999
"There isn't much to see next week on the positive side," said Paul Migliorato, at Commerz Securities (Japan). "The blue chips will remain under pressure - because of the strong yen - and there is a lot of uncertainty about US markets."
The Nikkei 225 index had its worst week for just over a year, dropping 777.6 points, or 4.3 per cent, to 17,084.24. The Topix index fell 4 per cent. The electrical machinery Topix sub-index, which contains exporters such as Canon and Hitachi, plunged 5 per cent..
"As long as stocks are weak, bonds will be supported,'' said Jun Fukashiro, fund manager at NCB Investment Management. Last week the yield on the 10-year benchmark government bond rose two basis points to 1.805 per cent.
Investors' main concern is a rise in the value of the yen, which has gone up 5.6 per cent to a high of 114.11 against the dollar over the past three weeks on demand from foreign investors wanting to buy Japanese stocks. This, however, decreases the likelihood that Japanese investors will put money overseas, encouraging them to invest domestically instead - in bonds.
"We're reducing foreign bonds and buying domestic bonds,'' said Keisaku Ujihara, at Sanwa Asset Management.
Companies such as Sony and Canon could slip, concerned that the US central bank may raise interest rates to curb inflation, thereby reducing consumer sentiment. Each one-yen fall in the value of the dollar means exporters lose several billion yen in operating profit. Canon, Japan's largest maker of office equipment, exports 83 per cent of its products, while Sony, Japan's second-largest consumer electronics company, exports 68 per cent of its goods. Concern about earnings at those companies has kept many foreign investors away from the stock market.
"It's hard to see anything that's going to change sentiment on the positive side," said Mr Migliorato. "People will try and find where the new level of support is and once we get through 17,000 [on the Nikkei], we see people saying 16,500."
"Everyone is looking into the dark, trying to figure out when the yen will stop rising," said Hitoshi Ichio, strategist at Commerz Securities (Japan). "Selling pressure on exporters won't go away as long as currency concern remains."
- 1 Disney heiress Abigail disowns her share of family profits in West Bank company
- 2 The secret report that helps Israel hide facts
- 3 'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
- 4 Israel's propaganda machine is finally starting to misfire
- 5 HSBC closes bank accounts belonging to Muslim clients in the UK
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Disney heiress Abigail disowns her share of family profits in West Bank company
Drew Barrymore’s sister Jessica found dead in her car surrounded by 'dozens of white pills'
'Women should not laugh in public,' says Turkey's Deputy Prime Minister in morality speech
The secret report that helps Israel hide facts
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...
£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...
£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...
£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...