Japan's Nikkei up 2.5 pct as exporters, banks gain

Reuters ^ | 03/19/08

[TigerLikesRooster]

Japan's Nikkei up 2.5 pct as exporters, banks gain

Reuters - Thursday, March 20TOKYO, March 19 - Japan's Nikkei share average rose 2.5 percent on Wednesday as investors snapped up exporters such as Toyota Motor Corp after a big interest rate cut in the U.S. helped ease concerns over demand in a key market for Japanese products.

Rises in bank Mitsubishi UFJ Financial Group and other financial shares also drove the market higher as investors took some relief from earnings results by Goldman Sachs and Lehman Brothers , which came in above forecasts.

Takeda Pharmaceutical Co jumped 3.7 percent to 5,050 yen after a source said on Wednesday that Japan's biggest drugmaker plans to spend some $5 billion to buy out Abbott Laboratories Inc in their 50-50 U.S. venture. [ID:nT7155]

But the Nikkei, which had surged as much as 3.4 percent in morning trading, pared gains into the close as investors fretted over the health of the global financial system and were generally wary of holding shares ahead of a national holiday on Thursday in Japan.

"Although U.S. stocks rose, the external environment hasn't calmed down. Financial fears still persist," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

"Goldman and Lehman's earnings were positive just in that they don't need rescue measures for bankruptcy."

The benchmark Nikkei average ended up 2.5 percent or 296.28 points at 12,260.44, rising for a second straight day after hitting a 2-1/2-year low of 11,787.51 on Monday.

The broader TOPIX index <.TOPX> gained 2.8 percent to 1,196.30.

The U.S. Federal Reserve slashed U.S. interest rates on Tuesday by three-quarters of a percentage point, in a move some investors hoped would support demand for cars, flat-screen TVs and other goods made by Japanese firms.

Shares of Toyota, which makes 30 percent of its car sales in the United States, gained 3.9 percent to 5,080 yen while electronics maker Sony Corp added 6.8 percent to 4,240 yen. Camera and copier maker Canon Inc shot up 6.3 percent to 4,570 yen.

Investors were also encouraged to buy exporters with the dollar holding steady at around 99 yen following a slide to a 13-year low below 96 yen on Monday. A stronger yen makes Japanese goods less competitive in overseas markets and cuts into profits when they are brought back to Japan.

"If you just look at the currency, exporters generally won't face a fall in earnings if the yen trades around 100 yen against the dollar," said Kazuhiro Takahashi, general manager of the equity marketing department at Daiwa Securities SMBC.

Japan's parliament rejected the government's latest nominee to replace the central bank governor when he retires at midnight, meaning the bank will be run by a temporary leader. [ID:nT266446]

Market players said the confusion surrounding the appointment did not hurt stocks on Wednesday, but a failure to break the stalemate could leave Japan behind in any rally. [ID:nT266446]

"The focus is now 99 percent on the Fed, and whether the Bank of Japan has its chief or not doesn't make much of a difference for global investors as the global market turmoil is so grave," Ichiyoshi Investment Management's Akino said.

"But the problem is when the market starts rebounding after the financial markets return to sort of normal. This peculiarity about Japan could cause Japanese stocks to lag behind," he added.

Bank shares advanced with top Japanese bank Mitsubishi UFJ gaining 5.4 percent to 853 yen.

No. 2 Mizuho Financial Group rose 4 percent to 386,000 yen. Sumitomo Mitsui Financial Group , Japan's third-biggest bank, climbed 5 percent to 678,000 yen.

Nomura Holdings Inc , Japan's largest brokerage, jumped 8.7 percent to 1,549 yen.

Trade was moderate on the Tokyo exchange's first section, with 2.1 billion shares changings hands, compared with last week's daily average of 2.4 billion.

Advancing shares outnumbered decliners by a ratio of more than 10 to 1.

[TigerLikesRooster]

Symbol	Name	Last Trade	Change	Related Info
^AORD	All Ordinaries	5,182.40 Mar 19	166.80 (3.12%)	Components, Chart, More
^SSEC	Shanghai Composite	3,804.05 3:00AM ET	42.45 (1.13%)	Chart, More
^HSI	Hang Seng	21,108.22 5:59AM ET	758.72 (3.47%)	Components, Chart, More
^BSESN	BSE 30	14,994.83 Mar 19	161.37 (1.09%)	Chart, More
^JKSE	Jakarta Composite	2,323.57 Mar 19	16.23 (0.69%)	Components, Chart, More
^KLSE	KLSE Composite	1,186.54 Mar 19	6.52 (0.55%)	Components, Chart, More
^N225	Nikkei 225	12,260.44 Mar 19	296.28 (2.48%)	Chart, More
^NZ50	NZSE 50	3,425.71 12:31AM ET	41.56 (1.20%)	Components, Chart, More
^STI	Straits Times	2,824.91 5:10AM ET	8.30 (0.29%)	Components, Chart, More
^KS11	Seoul Composite	1,623.39 5:04AM ET	1.16 (0.07%)	Components, Chart, More
^TWII	Taiwan Weighted	8,337.62 1:45AM ET	158.27 (1.93%)	Chart, More

[LibLieSlayer]

I guess Free Republic “doom and gloomers” are filled with... well... doom and gloom over the good news the last day or so.

LLS

[primatreat]

I to, feel badly for them. I ate two bowls of grits just now. Just looked at my portfolio and noticed lots of fist quarter dividends from my stocks. All reinvested of course. I picked up quite a few shares of C, WB, RLF,PFE,WYE at real low prices.

The bears didn’t kick me “off my honey”.

[TigerLikesRooster]

Considering the unprecedented amount of liquidity poured into the market, it is way too early to say that the situation is under control. Dow lost half of the upward gain it had a couple of days ago. Besides, dollar will continue to lose its value.

[ghostrider]

As I understand it, the Fed has dumped a trillion dollars of gasoline on a match, and only got one flash. It must be because the wads of cheap dollars don’t buy much gas.

[jiggyboy]

a big interest rate cut in the U.S. helped ease concerns over demand in a key market for Japanese products

Oh yeah that overnight rate is going right to the bottom line of the U.S. consumer. Everybody's taking out a HELOC today and going to the car dealer this weekend.

[jiggyboy]

"Goldman and Lehman's earnings were positive just in that they don't need rescue measures for bankruptcy."

Is Larry Kudlow broadcasting from Japan today? How could you possibly set the bar any lower than that?

So the Fed cut overnight rates for banks by possibly the highest absolute amount in history, and a relative percentage (33%) that is like something out of the last chapter of Atlas Shrugged. And the euphoric rally, obviously enabled immediately after it showed the first sign of weakness, lasted far less than even one trading session. These Japanese guys better have a real good reason for keeping their money anywhere in the U.S. stock market.

Thornburg Mortgage is cut in half again today, to 49c. How's that cheaper-than-cheap Fed Funds Rate working out for them?

[TigerLikesRooster]

It used to be that decisive Fed action was able to get the rally going for days. Now it only last for only a day or two even after the biggest intervention in decades.

We could be where we started by next week. Then what?

[LibLieSlayer]

Same here... the honey is sweet!

LLS

[LibLieSlayer]

We will have more good times and bad times but the end of Western Civilization and Capitalism is not going to happen in either of our lifetimes... we will see boom times again. The election will determine how deeply and how long this slowdown will last. Anyone tired of their American dollars and think that they are worthless... I'll pay the UPS charges if you want to send them to me! :-)

LLS