Nikkei slips 1.0pc as H1 dividend deadline passes
Wednesday, 29 September 2010
TOKYO, Sept 28 (Reuters): Japan's Nikkei average fell 1.1 per cent Tuesday, dropping as the deadline passed for investors to receive dividends on Tokyo stocks for the financial first half-year and as the yen held near its highest in almost two weeks.
But the market gained support from worries about possible Japanese intervention to stem the yen's strength, and from growing expectations that the Bank of Japan will discuss further moves to ease monetary policy at its meeting next week.
The Wall Street Journal also reported that the Fed would announce purchases of a much smaller amount of bonds for a brief period and leave open the question of whether it would do more, a decision that would turn on how the economy was doing.
"Revival of debt worries in Europe weighed on overseas markets, but the Japanese market is being supported by market expectations for further easing by both the Bank of Japan (BoJ) and the Fed," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.
The benchmark Nikkei shed 107.38 points to 9,495.76 and the broader Topix shed 0.8 per cent to 842.65.
Much of the declines were likely due to the "ex-dividend effect". Monday was the last day for investors to buy many Japanese stocks and still get dividends on them for the April-September half year.
Still the Nikkei has gained roughly 8 per cent this month, its best monthly performance since March, helped by intervention by Japanese authorities to weaken the yen two weeks ago.
There was speculation that Japanese authorities also intervened last Friday, but the dollar's inability to stay above 85 yen and the fact that no intervention was confirmed helped the Nikkei fall back.
The dollar edged down to 84.20 yen after falling as low as 84.11 yen Monday, its weakest since the Sept 15 intervention.
"The market consensus is now that there won't be endless yen strengthening, that if the dollar falls below 84 yen authorities are likely to intervene," said Kenichi Hirano, operating officer at Tachibana Securities.
"But the Nikkei isn't going to rebound to 10,000 without at least a 2-3 yen rise in the dollar -- and that's going to be tough to achieve."
Despite this month's gains, the Nikkei's rise this quarter is only about 1 per cent, and it continues to lag other major stock markets. The S&P 500 has gained more than 10 per cent this quarter, while South Korean shares have risen some 9.3 per cent.
Support for the benchmark was expected to stay solid near 9,450, the level of its 75-day moving average.
Shares of Takefuji Corp, which have fallen about 56 percent this year, did not trade for a second day due to a glut of sell orders. Sources said that the money lender plans to file for bankruptcy later Tuesday with $5.2 billion in debt.
The Tokyo Stock Exchange, which suspended trade of the consumer lender's shares for most of Monday, placed it on watch for potential delisting, citing the possibility of it failing.
Other consumer lenders also fell, with Acom down 1.3 per cent at 1,327 yen and Promise slipping 0.9 per cent to 683 yen.
A number of exporters slipped as well, hurt by a dip in New York shares, with Kyocera Corp down 2.2 per cent at 8,000 yen and Sony Corp shedding 1.1 per cent to 2,593 yen.
But Daihatsu Motor Co jumped 3.2 per cent to 1,100 yen. Toyota Motor Corp will buy 660cc minivehicles from unit Daihatsu Motor Co and sell them under its own brand in Japan, the Nikkei business daily reported.
Trade was thin, with 1.37 billion shares changing hands on the Tokyo exchange's first section, its lowest volume in more than two weeks.
Declining shares outnumbered advancing ones, 987 to 504.
But the market gained support from worries about possible Japanese intervention to stem the yen's strength, and from growing expectations that the Bank of Japan will discuss further moves to ease monetary policy at its meeting next week.
The Wall Street Journal also reported that the Fed would announce purchases of a much smaller amount of bonds for a brief period and leave open the question of whether it would do more, a decision that would turn on how the economy was doing.
"Revival of debt worries in Europe weighed on overseas markets, but the Japanese market is being supported by market expectations for further easing by both the Bank of Japan (BoJ) and the Fed," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.
The benchmark Nikkei shed 107.38 points to 9,495.76 and the broader Topix shed 0.8 per cent to 842.65.
Much of the declines were likely due to the "ex-dividend effect". Monday was the last day for investors to buy many Japanese stocks and still get dividends on them for the April-September half year.
Still the Nikkei has gained roughly 8 per cent this month, its best monthly performance since March, helped by intervention by Japanese authorities to weaken the yen two weeks ago.
There was speculation that Japanese authorities also intervened last Friday, but the dollar's inability to stay above 85 yen and the fact that no intervention was confirmed helped the Nikkei fall back.
The dollar edged down to 84.20 yen after falling as low as 84.11 yen Monday, its weakest since the Sept 15 intervention.
"The market consensus is now that there won't be endless yen strengthening, that if the dollar falls below 84 yen authorities are likely to intervene," said Kenichi Hirano, operating officer at Tachibana Securities.
"But the Nikkei isn't going to rebound to 10,000 without at least a 2-3 yen rise in the dollar -- and that's going to be tough to achieve."
Despite this month's gains, the Nikkei's rise this quarter is only about 1 per cent, and it continues to lag other major stock markets. The S&P 500 has gained more than 10 per cent this quarter, while South Korean shares have risen some 9.3 per cent.
Support for the benchmark was expected to stay solid near 9,450, the level of its 75-day moving average.
Shares of Takefuji Corp, which have fallen about 56 percent this year, did not trade for a second day due to a glut of sell orders. Sources said that the money lender plans to file for bankruptcy later Tuesday with $5.2 billion in debt.
The Tokyo Stock Exchange, which suspended trade of the consumer lender's shares for most of Monday, placed it on watch for potential delisting, citing the possibility of it failing.
Other consumer lenders also fell, with Acom down 1.3 per cent at 1,327 yen and Promise slipping 0.9 per cent to 683 yen.
A number of exporters slipped as well, hurt by a dip in New York shares, with Kyocera Corp down 2.2 per cent at 8,000 yen and Sony Corp shedding 1.1 per cent to 2,593 yen.
But Daihatsu Motor Co jumped 3.2 per cent to 1,100 yen. Toyota Motor Corp will buy 660cc minivehicles from unit Daihatsu Motor Co and sell them under its own brand in Japan, the Nikkei business daily reported.
Trade was thin, with 1.37 billion shares changing hands on the Tokyo exchange's first section, its lowest volume in more than two weeks.
Declining shares outnumbered advancing ones, 987 to 504.