Nikkei up 3% as Panasonic jumps, soft yen helps

Nikkei up 3% as Panasonic jumps, soft yen helps
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First Published: Mon, Oct 20 2008. 11 02 AM IST
Updated: Mon, Oct 20 2008. 11 02 AM IST
Tokyo: The Nikkei average climbed 3% on Monday, buoyed by Panasonic after a report that the electronics maker was likely to beat its profit forecast, while a softer yen helped battered shares of exporters.
Shares of Nippon Steel Corp and JFE Holdings Inc advanced after the Nikkei business daily said Japan’s top two steelmakers were likely to raise their annual profit forecasts due to lower costs and price hikes.
Analysts said a softer yen helped push up the market, but gains were mostly due to short-covering.
“The firm dollar is leading investors to pick up cyclical stocks that were sold off last week,” said Takahiko Murai, general manager of equities at Nozomi Securities.
“But the gains probably won’t last. The deterioration of the real economy is happening much faster than expected. We need comprehensive counter-measures, rather than just those only for the financial system.”
By 0431 GMT the Nikkei average added 262.24 points to 8,956.06, after ending the morning session up 0.5%.
The broader Topix gained 2.9% to 920.18.
The dollar was trading at 101.80 after hovering around 101.65 yen earlier. Investors welcome a softer yen as it helps boost exporters’ overseas profits when they are brought home.
“Coupled with receding fears over the financial crisis for the time being, news about Nippon Steel and Panasonic spread the sense of relief in the Japanese market,” said Katsuhiko Kodama, a senior strategist at Toyo Securities.
“The market will likely raise its downside level little by little after an extreme sell-off.”
US stocks fell on Friday, with Caterpillar and United Technologies leading the Dow lower, after a report that U.S. housing starts fell to their lowest in 17-“ years last month, adding to recession fears.
Panasonic jumps, exporters gain
Shares of Panasonic jumped 7.3% to 1,609 yen after the Nikkei business daily reported that the electronics maker, which had predicted a drop in operating profit for the first half, is now seen beating its forecast by more than 20 billion yen ($196.9 million).
Nippon Steel rose 1.6% to 321 yen and JFE Holdings gained 4% to 2,315 yen.
The weaker yen helped exporters climb, with Toyota Motor Corp rising 4.7% to 3,580 yen and Sony Corp jumping 5.3% to 2,570 yen.
Still, so-called defensive stocks such as drugmakers continued to be popular amid worries about the global economy. Takeda Pharmaceutical Co climbed 2.5% to 4,600 yen.
“That defensive stocks are up means no one is buying proactively. We are not seeing buying other than short-covering,” said Yutaka Miura, a senior technical analyst at Shinko Securities.
Asahi Breweries fell 0.7% to 1,666 yen, weighing on the overall market. Japan’s largest beer maker denied a report on Monday that it was close to completing due diligence for a possible offer for Belgian brewer InBev’s South Korean division.
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First Published: Mon, Oct 20 2008. 11 02 AM IST
More Topics: Nikkei | Topix | Panasonic | Yen | Dollar |