Tokyo's Nikkei blows past 9,500
Japanese banks soar; Asia markets rise after Wall St. rally
By Allen Wan, CBS.MarketWatch.com
Last Update: 3:02 AM ET July 2, 2003
TOKYO (CBS.MW) - Tokyo's main stock index soared over 3 percent to end at a fresh 9-month high Wednesday as improving business confidence in Japan, Wall Street's surge and the yen's weaker tone spurred on banks and tech issues for a second day. Asian markets rose across the region.
The Nikkei Average jumped another 313 points, or 3.4 percent, to 9,592.24. The broader Topix rose 28 points to 945.
Japanese bank stocks were the biggest high-flyers though technology and real estate issues weren't too far behind.
Mizuho Financial (MZHOF: news, chart, profile) (JP:8411: news, chart, profile), the world's biggest in terms of assets, soared 18.5 percent to 122,000 yen. UFJ Holdings (UFJHF: news, chart, profile) surged 15.3 percent to 226,000 yen. Resona (JP:8308: news, chart, profile), which was bailed out by the government recently, gained 8 percent to 95 yen.
Analysts say that Japanese banks are rebounding as fears of a financial system collapse have dissipated due in part to the government's more aggressive approach to deal with bad loans and willingness to use public funds to bail out troubled banks.
Jesper Koll, chief economist at Merrill Lynch in Tokyo, said that the success of the Resona nationalization has altered the banking landscape. "Politically, the decisive use of taxpayer funds faced almost no opposition. Economically, the Resona nationalization removes fears of a 'credit crunch' with the new management under firm orders to maintain, even expand, the small/medium size loan book," he said in a note.
Seiji Otsuka, analyst at JP Morgan in Tokyo, said that Japanese bank stocks have been rallying in recent days on the back of declines in bank bad loans, Wall Street's rally as well the residual effects from the government's bailout of Resona.
"Public funds to Resona Bank have made people feel better about the financial system. Also the public funds were like a free gift to Resona stockholders and made them and other investors want to buy more stocks," he told CBS MarketWatch.
A recent slew of positive Japanese economic data has also fueled the rally such as stronger-than-expected industrial production data and improved corporate confidence numbers from the tankan. Foreigners have been the biggest buyers of Japanese stocks.
Markets across the region were on the rise after Wall Street staged a late day advance, with the Dow gaining 0.6 percent and the Nasdaq rising 1.1 percent. South Korea's Kospi index rose 1.6 percent to 685, Taiwan's Weighted Average jumped 1.5 percent to 5,095, Hong Kong's Hang Seng edged up 0.1 percent to 9,589 and Singapore's Straits Times Index rose 0.7 percent to 1,466. But Australia's All Ordinaries Index eased 0.2 percent to 3,003. |
