Tokyo Market: Nikkei gains but interest shifts to Jasdaq
Sunday 06 June 1999
At the other end of the spectrum, Japan is preparing a new budget to help pay for the job creation programme the government will announce on Friday. So bonds are likely to fall as further signs of a sluggish economy force the government to increase bond sales to finance public spending. "There is further downward movement to go as talk of an extra budget becomes more serious," said Xinyi Lu, chief strategist at Paribas Capital Markets. "Economic growth figures are going to be closely watched."
The Nikkei gained 2 per cent last week, its first week of gains in four, to close at 16,300.75 while the benchmark bond yield rose 15 basis points to 1.640. Yet in the absence of strong buying incentives - and with concern about instability in Asia, domestic joblessness and potential rising interest rates - interest shifted to the over-the-counter index, a trend that may continue. The Jasdaq jumped 10 per cent for the week, after a month of losses, largely on individual and broker buying. Internet-related megachips surged 19 per cent on the OTC market, and Obic, a computer issue on the TSE second section, climbed 13 per cent on Friday. "Companies on the broader index are the most vulnerable to rising US interest rates and the whims of foreign buying," said Tatsuo Kurokawa, at Nomura Securities investment information department. "The only activity we're likely to see is individual investors picking up small and mid-cap issues." While the government may allocate as much as Y10,000bn (pounds 51.2bn) to new programmes, some economists dismiss the plan as just throwing money at the problem, not addressing structural inefficiencies.
"The proposals indicate that policy makers believe they can support employment mainly by tinkering with the existing system, rather than through wholesale reform," said Ron Bevacqua, a Merrill Lynch Japan economist. "Banks misprice risk, corporations misallocate capital, and a convoy system-mentality stabilises markets and creates barriers to new entrants."
The need for a supplementary budget is expected to grow after next Thursday's GDP figures for the first quarter. Economists forecast the economy shrank 0.1 per cent in the first quarter of 1999, and will grow 0.2 per cent in the second.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £25000 per annum + OTE £35000: SThree: SThree are a global FTSE 250 b...
£20000 - £25000 per annum + OTE £35K - £45K: SThree: SThree Group have been we...