Tokyo stocks edge down on concerns of overheating, financial weigh

08:27, April 01, 2010      

Email | Print | Subscribe | Comments | Forum 

Japan's Nikkei Stock Average edged down 0.06 percent on Wednesday having reached an 18-month intraday high as fears of overheating and concerns over government plans to limit deposits at Japan Post capped gains.

The key benchmark Nikkei lost 7.2 points from Tuesday's 18- month closing high to 11,089.94. The broader Topix index of all First Section issues on the Tokyo Stock Exchange lost 0.77 point, or 0.08 percent, to 978.81.

Brokers said however that the market, on the last day of the current financial year, was still bullish and being underpinned by optimism over upcoming corporate earnings reports from the U.S. and Japan, the latter season of which swings into full gear in early May.

"The market is basically bullish, but its upside is capped by wariness over rises in shares," said Masatoshi Sato, a senior strategist at Mizuho Investors Securities Co., adding " expectations are growing strong about upward revisions in profit estimates when Japanese firms start releasing their earnings reports in April."

Fresh incentives such as better U.S. macroeconomic readings are needed to boost the Nikkei to top the 12,000 line, he concluded. Other analysts indicated the market might be overheating following gains made over the past few months.

"The market is overheating in terms of a technical perspective. It's hard to expect shares to keep rising as fast as they gained in the past two months," said Koichi Kurose, chief strategist in Tokyo at Resona Bank Ltd.

However, as the new financial year gets underway the market's mood is optimistic with high expectations for earnings oversees, particularly in the U.S. as well as domestic corporate profit reports and there is a consensus among market players that trading volumes will rise as will buying from foreign investors.

"Though in the short term there are concerns about overheating, over the mid to longer term things are looking quite bright, what with expectations for Japanese earnings this year, rising trading volumes, and continued buying by foreigners," said one Tokyo-based market expert.

Financials fell on such concerns as well as news of a government plan to double the cap on deposits at Japan Post fueling fears deposits will be channeled away from commercial lenders.

Subsequently, Mitsubishi UFJ Financial Group Inc. lost 1.41 percent to 490 yen and Mizuho Financial Group Inc. retreated 0.54 percent to 185 yen. Meanwhile Sumitomo Mitsui Financial Group Inc. fell 1.43 percent to 3,090 yen.

Despite the yen sliding to a three-month low of 93.60 yen to the dollar, export-related and tech issues were sluggish in Wednesday with Kyocera Corp. losing 0.81 percent to 852 yen and Sony Corp. shedding 0.83 percent to 3,580 yen. Pioneer Corp. also ended traded in negative territory, sinking 3.92 percent to 343 yen and NEC Corp. retreated 0.35 percent to 281 yen.

Robotics maker Fanuc Ltd. fell 0.90 percent to 9,920 yen and chip test maker Advantest Corp. edged down 0.09 percent to 2,338 yen. NGK Insulators Ltd. lost nearly one percent to close at 1,907 yen.

Bucking the downward trend was Canon Inc. who rose 0.12 percent to 4,330 yen.

Alps Electric Co Ltd. also closed positive after the Nikkei business daily newspaper said a state-backed fund would invest in an electronics components unit to be split off from the electronics components maker.

The state-backed Innovation Network Corp of Japan has decided to invest 3 billion yen (32 million U.S. dollars) in the unit, a venture with Tohoku University working on technology for components used in current regulators and transformers, the Nikkei said.

Alps Electric Co Ltd. edged up 0.8 percent to close at 645 yen.

Some 2 billion shares changed hands on the Tokyo exchange's first section, in line with Tuesday's volume.

Declining shares outnumbered advancing ones by 812 to 723.



  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Boeing employees view a 787 Dreamliner scheduled for delivery to All Nippon Airways (ANA) of Japan during a delivery ceremony at Paine Field in Everett, Washington September 26, 2011. (Xinhua/AFP Photo)
  • A visitor watches a portrait of Emperor Kangxi in the Louvre Museum in Paris, capital of France, on Sept. 26, 2011. About 130 artifacts from the Forbidden City, China's ancient imperial palace museum, started to greet the French public in the Louvre Museum on Monday in an exhibition that will run until Jan. 9, 2012. (Xinhua/Gao Jing)
  • A model presents a creation of the Italian fashion brand Normaluisa during the Milan Fashion Week Women's Wear Spring/Summer 2012 in Milan, northern Italy, Sept. 26, 2011. (Xinhua/Wang Qingqin)
  • Guests are seen at the site of opening ceremony of the 2011 Beijing Design Week and the first Beijing International Design Triennial held at China Millennium Monument in Beijing, capital of China, Sept. 26, 2011. During the Beijing Design Week from Sept. 26 to Oct. 3, more than 130 activities will be launched, including more than 30 international events and over 90 Chinese exhibitions. (Xinhua/Luo Xiaoguang)
  • Thousands of Sirte civilians evacuate Sirte, Libya, where the war between NTC forces and pro-Gaddafi militia is going on Sept 26, 2011. (Xinhua/Amru Salahuddien)
  • Tanks of forces of the National Transition Council (NTC) fire at pro-Gaddafi militia during heavy battles in Sirte front lines, Libya, Sept. 26, 2011. The NTC forces bombed pro-Gaddafi military sites with tanks, missiles and heavy artillery side by side with NATO aircraft bombing. Meanwhile thousands of civilians are evacuating the city with the help of NTC fighters. (Xinhua/Amru Salahuddien)
Hot Forum Discussion