Nikkei Follows Wall Street Higher
Thu April 3, 2003 12:14 AM ET
reuters.com
By David McMahon
TOKYO (Reuters) - Tokyo stocks edged up on Thursday morning as blue-chip exporters like Sony Corp chased a Wall Street rally, but persistent worries about Japan's weak banks and economy slowed the market's climb.
Sony firmed 1.45 percent to 4,210 yen, tracking strong rises in U.S. technology stocks such as Intel Corp after news that U.S. troops were moving in on Baghdad from two directions.
But Tokyo's rise was muted compared with the 3.59 percent rally by the U.S. Nasdaq index on Wednesday, with hefty falls in big banks like Mizuho Financial Group Inc curbing gains.
The Nikkei average was up 0.43 percent at 8,104.89 as of midsession, after jumping as high as 8,178.24 in early trade, where the benchmark hit technical resistance at its 25-day moving average which stood at 8,181 as of Wednesday's close.
The TOPIX index was up 0.44 percent at 801.03.
"Technology stocks are rising today on the back of the Wall Street rally, and this is the sector we can expect to rebound in the case of a quick resolution in Iraq," said Reiko Nakayama, head of Marusan Securities' investment strategy division.
A Reuters global poll of 12 fund managers and economists taken earlier this week showed they expect, on average, the war in Iraq to be over in six weeks.
But analysts said that war worries were not the major factor weighing on the Tokyo market.
"The fall in bank shares and relatively mild gains today reflect the fact that all the fundamental problems in the Japanese economy remain unsolved," Nakayama said.
Banking shares took a beating for the second day running.
Mizuho, the world's biggest lender by assets, was down 5.4 percent at 77,100 after earlier hitting a new lifetime low of 76,000 yen. It is down 22.1 percent for the week.
Japan's four megabanks are all expected to post net losses for the year that ended on Monday, hit by loan-loss charges on their mountains of bad debt, and losses on their shareholdings inflated by the Nikkei's recent fall to 20-year lows.
Second-ranked Sumitomo Mitsui Financial Group Inc dipped 4.28 percent to 179,000 yen, and was the most active issue by value on the Tokyo Stock Exchange.
Gainers outnumbered decliners 747 to 592. Volume picked up a notch, with 469.90 million shares changing hands on the first section, the highest morning total in almost three weeks.
POLICY DESPAIR
Other blue-chip exporters to rise on the back of U.S. gains included office equipment and camera giant Canon Inc, up 2.39 percent at 4,290 yen, and electronics parts maker Kyocera Corp T> , up 2.35 percent at 6,100 yen.
But analysts said that selling by corporate pension funds, which are dumping stocks in preparation to return a portion of their pension assets to the state, would continue to cap gains in blue-chip issues.
The ability of Prime Minister Junichiro Koizumi to push through promised reforms is also in question, after Agriculture Minister Tadamori Oshima resigned on Monday over a money scandal involving his secretary.
"In some ways the war in Iraq is just a short-term distraction," said Masaharu Sakudo, adviser at Tachibana Securities.
"The problem is that long-term investors have no incentives to buy Japanese stocks, given the dismal prospects for the Japanese economy, and the backtracking on reforms by the Koizumi government."
The ruling Liberal Democratic Party has decided to submit a bill that will allow companies to suspend market-value accounting for their long-term shareholdings, the Nihon Keizai Shimbun said on Thursday.
Analysts say the move would only move Japan away from globally accepted accounting standards and possibly discourage foreign investors.
A number of Japanese companies, including Mitsubishi Electric Corp, have revised their earnings forecasts down in recent days due to unrealized losses on their shareholdings. |
