Tokyo: Japan’s Nikkei average gained 0.6% on Tuesday, 25 September, as shipping shares rose amid the Baltic Dry Index at record highs, and Toyota Motor Corp. rose on a news report about its plan for a fuel-efficient ultra-compact car in Europe.
The International Monetary Fund issued a report that turmoil in global credit and money markets will likely continue as investors worry about the size of financial losses and where they might arise.
But market players said concern about credit woes was eased as the IMF also said that under one model, the market-to-market losses caused by the subprime problems could reach as much as $200 billion, and that was helping bank and property shares to advance.
“It’s scary when you don’t know what it is, but we are now getting a better picture of this monster, the subprime issue,” said Tsuyoshi Nomaguchi, strategist, Japanese equity research, investment advisory department at Daiwa Securities Co Ltd.
Nomaguchi said the IMF’s number has laid out the scope of the subprime issue, helping property and bank shares to advance.
“The market may have factored in quite a bit of this problem,” he added.
The market largely shrugged off the news that Japan’s Yasuo Fukuda, a seasoned moderate who favours closer ties with Asian neighbours, was picked as prime minister by parliament’s lower house on Tuesday, ensuring him the nation’s top job.
The benchmark Nikkei ended up 89.12 points, or 0.55 percent, at 16,401.73, while the broader TOPIX index put on 0.95 percent to 1,566.83.
Trade was slow, with 1.9 billion shares changing hands on the Tokyo exchange’s first section, compared with a daily average of 2.3 billion in August. Advancing stocks beat declining ones by 907 to 699.
After the market closed, Japan’s struggling consumer electronics maker Victor Co of Japan Ltd (JVC) said it would introduce an early retirement programme to reduce its work force by 18 percent, or 1,150 workers. Prior to the announcement, JVC ended up 3.6 percent at 229 yen.
Tokyo: Japanese share prices were narrowly mixed at the end of morning trade on Tuesday, 25 September, as overnight losses on Wall Street weighed on market sentiment, dealers said.
They said investors were cautious ahead of a raft of domestic and US economic data due later this week, while showing little reaction to the ruling party’s decision to choose moderate veteran Yasuo Fukuda as prime minister.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index of leading shares lost 22.95 points or 0.14% to 16,289.66 by the lunch break.
The broader Topix index of all first-section shares edged up 1.22 points or 0.08% to 1,553.29.
Decliners outnumbered gainers 951 to 638, with 113 issues unchanged.
Turnover fell to 813 million shares from 904 million Thursday morning. Japan’s financial markets were shut on Monday for a public holiday.
Investors, nervous about the health of the Japanese economy, continued to lock in recent gains ahead of a slew of data due Friday on unemployment, consumer prices and industrial production for August, dealers said.
Meanwhile in the US, existing home sales for August — when rising mortgage defaults were roiling financial markets — as well as consumer confidence in September were due later Tuesday.
A late downturn on Wall Street amid nervousness about a strike at auto giant General Motors provided another reason for players to take profits.
The election of Yasuo Fukuda Sunday as president of the ruling Liberal Democratic Party, which makes him almost certain to become the new prime minister later Tuesday, was widely expected so had little impact, dealers said.
The market was waiting to see who Fukuda would name for his cabinet later in the day, although there was a possibility he will retain existing finance and economy ministers, dealers said.
“Investors are holding to the sidelines, as they await the release later this week of closely-watched economic data and the appointment of a new cabinet,” said Hiroichi Nishi, an equities general manager at Nikko Cordial Securities.