Tokyo Market: Markets may be hamstrung by the banks
Sunday 21 February 1999
Sony, Fuji Photo Film and other companies that rely heavily on US sales are set to rise further if Japanese officials keep talking up the dollar, investors say.
The dollar rose to an 11-week high of Y120.75 on Friday following a chorus of official statements favouring a weaker yen. That bolsters exporters' dollar-denominated earnings when they're repatriated.
But the market may be hamstrung by banks as the approach of the end of the Japanese fiscal year on 31 March ratchets up pressure on insurance companies and other large corporate investors to improve their balance sheets by selling assets.
"The Japanese government has made it pretty clear that it can live with the dollar at Y120, and that's encouraging for the blue-chip exporters," said Hideo Kito, president of Tokyo Kito Investment Management. "But the end of the fiscal year gives the upper hand to sellers in this market."
The key Nikkei 225 average is likely to move between 13,800 and 14,200, Mr Kito predicted. The benchmark last week rose 0.9 per cent to 14,098.04.
Recent gains by bank shares on the back of a government bailout plan have increased the temptation to sell for cash-hungry companies. The Topix banks index has risen 3.5 per cent in the last two weeks, boosted by financial authorities who gave a preliminary nod to their request for Y7,450bn in emergency public funding.
Daiwa Securities said last week it wants to sell as much as Y50bn in shares it holds in other companies in the near future. Traders are also bracing for more unpleasant surprises as Japanese companies begin posting interim earnings en masse.
Matsushita Electric Industrial, Japan's biggest consumer electronics company, reports third-quarter results on Tuesday, and tiremaking giant Bridgestone meets the press on Friday.
Bonds are likely to rise as record-low overnight lending rates will probably encourage investors to seek higher yielding long-term bonds. Last week, the Bank of Japan cut the rate to a low of 0.15 per cent to help pull the economy out of recession. Last week, the benchmark bond yield fell 32 basis points to 1.760 per cent.
- 2 The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
- 3 Ball pool for adults opens in London
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
- 5 Baldness could soon be treated using stem cells, scientists hope
Woman falls to her death as she celebrates marriage proposal at the edge of Ibiza cliff
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
Ball pool for adults opens in London
Amal Clooney gives excellent response to fashion question at European Court of Human Rights
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...