Remember.For.Playing.Long.Term..Never.Use.Ur.Margin.>15%
Free.$25
BCA.&.Mandiri
Wednesday, June 27, 2007
Friday, June 22, 2007
Scary.Me..!
Just.take.a.look.at.September.1992...
fall.about..4.805.pips.in.One.Month...
From.the.top---251.56..to..203.51---
Sunday, June 17, 2007
Shot.The.Sheriff........!!
Sell.Limit.245.00..To.243.07...:)
245..already my concern since 4th June..
U can find Ma Older Post...
245..already my concern since 4th June..
U can find Ma Older Post...
Thursday, June 14, 2007
Preview – No Interest Rate Hike Expected in the Land of the Rising Sun
The two-day monetary policy meeting of the Bank of Japan is underway. The BOJ is expected to declare its interest rates in the mid Tokyo hours (near 0300 – 0430 GMT) on 15-June. It is widely expected to keep the interest rate (the uncollateralized overnight call rate) unchanged at 0.50%. The last time the BOJ had met was on May 17-18 and had kept rates steady.
The last interest rate change was on 21-Feb-07 when rates by had been raised 25 Bps to 0.50% from the then existing 0.25%. The BOJ is currently in a rates raising cycle starting 14-Jul-06. Rates had been raised by 25 Bps for the first time since 2002 officially ending the BOJ’s “Zero Interest Rate Policy”.
The recent Core CPI (Y/Y) had come in at – 0.1% for April, up from –0.3% in March. The Core Tokyo CPI for May (Y/Y) had come in at 0.0%, unchanged from April. However, the recent growth numbers out of Japan have been encouraging. The Japanese GDP for Jan-Mar 2007 had come in at 0.8%, which translates into an annualized rate of 3.3%, implying that Japanese recovery is well underway.
It is very interesting to watch the behavior of the Japanese Libor rates. The near term 3-month rate has not moved up and is below the March-07 High while the 12-Month Libor rate has moved up sharply, past the March-07 High. This clearly indicates that the markets are expecting unchanged rates from the BOJ for the next few months and then a rate hike later on in the year. The chart of the 3-Month Libor and the 12-Month Libor for 2007 is given below for a better view (see Chart 1).
Japanese Government Bond Yields are rising, in line with the rise in Bond yields globally. The Yield chart (see Chart 2). for the 10-Year JGB in 2007 is given below. The yield has risen from a low of 1.47% in March-07 to 1.98% currently. Note that the BOJ had already hiked in Feb-07. This suggests that the markets are again expecting a hike sometime in 2007.
Most traders might be thinking that since BOJ is expected to hike later on in the year then why is Yen at or near record lows against the EUR and USD. Doesn’t it seem logical that a currency should go up when its Yield goes up? The answer is that Currencies move on Yield Differentials and NOT on Yield themselves. If the market is discounting one rate hike by BOJ while it thinks that US FED or the ECB would hike more than once, then the currency, which is expected to have greater increase in rates, goes up.
With the BOJ very unlikely to raise Interest rate this time around, most of the attention would be on BOJ Governor Fukui’s speech after the meet to search for possible cues as to the official stand on Interest rates.
Technically, USD-JPY is currently in a large uptrend trading at its highest level since June 2002. The next important Resistance comes in at 124.50. On the downside the important short term Support is at 122.30, the level from which the pair broke out a couple of days ago. A “surprise” hint of a rate hike by Fukui could produce a small dip in the pair, towards 122.30 or maybe 121.30.
Technically, EUR-JPY is also in a large uptrend and is currently headed towards 164.60, its record high, which is expected to be tested over the next few days. A move above that (highly possible) would take the pair towards 166.00. On the downside, the short term Support is at 163.10 and then at 162.50. The big long term Support is at 161.10, and buyers are likely to be seen on dips while the larger Support holds.
Trade Wise, Trade Well!
The last interest rate change was on 21-Feb-07 when rates by had been raised 25 Bps to 0.50% from the then existing 0.25%. The BOJ is currently in a rates raising cycle starting 14-Jul-06. Rates had been raised by 25 Bps for the first time since 2002 officially ending the BOJ’s “Zero Interest Rate Policy”.
The recent Core CPI (Y/Y) had come in at – 0.1% for April, up from –0.3% in March. The Core Tokyo CPI for May (Y/Y) had come in at 0.0%, unchanged from April. However, the recent growth numbers out of Japan have been encouraging. The Japanese GDP for Jan-Mar 2007 had come in at 0.8%, which translates into an annualized rate of 3.3%, implying that Japanese recovery is well underway.
It is very interesting to watch the behavior of the Japanese Libor rates. The near term 3-month rate has not moved up and is below the March-07 High while the 12-Month Libor rate has moved up sharply, past the March-07 High. This clearly indicates that the markets are expecting unchanged rates from the BOJ for the next few months and then a rate hike later on in the year. The chart of the 3-Month Libor and the 12-Month Libor for 2007 is given below for a better view (see Chart 1).
Japanese Government Bond Yields are rising, in line with the rise in Bond yields globally. The Yield chart (see Chart 2). for the 10-Year JGB in 2007 is given below. The yield has risen from a low of 1.47% in March-07 to 1.98% currently. Note that the BOJ had already hiked in Feb-07. This suggests that the markets are again expecting a hike sometime in 2007.
Most traders might be thinking that since BOJ is expected to hike later on in the year then why is Yen at or near record lows against the EUR and USD. Doesn’t it seem logical that a currency should go up when its Yield goes up? The answer is that Currencies move on Yield Differentials and NOT on Yield themselves. If the market is discounting one rate hike by BOJ while it thinks that US FED or the ECB would hike more than once, then the currency, which is expected to have greater increase in rates, goes up.
With the BOJ very unlikely to raise Interest rate this time around, most of the attention would be on BOJ Governor Fukui’s speech after the meet to search for possible cues as to the official stand on Interest rates.
Technically, USD-JPY is currently in a large uptrend trading at its highest level since June 2002. The next important Resistance comes in at 124.50. On the downside the important short term Support is at 122.30, the level from which the pair broke out a couple of days ago. A “surprise” hint of a rate hike by Fukui could produce a small dip in the pair, towards 122.30 or maybe 121.30.
Technically, EUR-JPY is also in a large uptrend and is currently headed towards 164.60, its record high, which is expected to be tested over the next few days. A move above that (highly possible) would take the pair towards 166.00. On the downside, the short term Support is at 163.10 and then at 162.50. The big long term Support is at 161.10, and buyers are likely to be seen on dips while the larger Support holds.
Trade Wise, Trade Well!
Tuesday, June 12, 2007
Friday, June 8, 2007
Wednesday, June 6, 2007
Stocks fall sharply after Bernanke’s speech
Fed chief's comments imply no interest rate cut coming
Updated: 5:12 p.m. ET June 5, 2007
NEW YORK - Wall Street skidded lower Tuesday after comments from Federal Reserve Chairman Ben Bernanke and a strong reading on the service sector suggested the central bank has little reason to lower interest rates.
Bernanke’s speech by satellite to an international monetary conference in South Africa Tuesday spurred investors to sell a day after the Dow and Standard & Poor’s 500 index edged up to new highs. Bernanke remarked that the economy will recover from its recent feeble performance, despite a housing slump that he said could drag on the economy for longer than anticipated.
Bernanke’s forecast of rebounding growth, as well as his assessment that inflation is “ebbing” but remains “somewhat elevated,” made it appear unlikely the Fed will lower rates anytime soon, a disappointment for Wall Street. Behind the stock market’s surge, driven primarily by strong takeover activity, has been a backdrop of stable interest rates and the possibility of a rate cut; recently, though, with bond yields creeping up, some investors fear the Fed may alter that climate.
“The market is hoping for slow growth and moderate inflation, and now there’s concern they might have to bump up rates in the second half of the year,” said Jim Herrick, director of equity trading at Baird & Co.
While the Fed chairman’s comments stalled a months-long rally, many analysts have been predicting Wall Street would soon pull back before heading higher later this year. Before Tuesday’s decline, the Dow and the S&P 500 had risen more than 8 percent since the beginning of the year.
A robust report on the service sector from the Institute for Supply Management failed to boost stocks. The ISM’s nonmanufacturing index came in at 59.7 in May, higher than expected and up from April’s reading of 56.0. A reading above 50 indicates expansion in the service sector, a diverse group of industries that represents about 80 percent of U.S. economic activity. Investors want to see growth but worry that if it’s too robust, it could prompt a rate hike.
According to preliminary calculations, the Dow fell 80.86, or 0.59 percent, to 13,595.46, after earlier falling more than 100 points.
Broader indexes also retreated. The Standard & Poor’s 500 index fell 8.23, or 0.53 percent, to 1,530.95, while the Nasdaq composite index shed 7.06, or 0.27 percent, to 2,611.23.
Bonds slipped after Bernanke’s comments and the strong service sector data.
“The good news is he did say this residential real-estate morass won’t leach out into the main economy. The bad news is he’s still beating the drum pretty hawkishly on inflation,” said Jack Ablin, chief investment officer at Harris Private Bank.
The yield on the benchmark 10-year Treasury note rose to 4.98 percent from 4.93 percent late Monday. The 10-year yield is trading at 9-month highs, and appears poised to break through 5 percent, a level not reached since August 2006.
Stocks sold off further after a midday speech by U.S. Treasury Secretary Henry Paulson, who said he has been pressuring China to make its exchange rate more flexible. If the yuan is given the chance to rise in value, it could have a dampening effect on the U.S. dollar.
The dollar fell against other major currencies, while gold prices edged lower.
In takeover news, telecommunications company Avaya Inc. said late Monday it agreed to an $8.2 billion offer by private equity firms Silver Lake and TPG Capital. Avaya rose 31 cents to $17.03.
Retail stocks took a hit after home goods seller Bed Bath & Beyond Inc. late Monday warned its fiscal first-quarter earnings may fall below analyst estimates. The stock lost $2.20, or 5.4 percent, to $38.27.
The biggest decliner among the 30 Dow component companies was DuPont Co., downgraded by Lehman Brothers to an “equal weight” rating from “overweight.” The chemicals company fell 95 cents to $52.24.
In other corporate news, Ryanair Holdings PLC reported a record full-year 2006 profit despite higher fuel prices and tough competition, but made a cautious forecast for 2007. The Irish airline’s U.S. shares fell $1.69, or 4.2 percent, to $38.66.
Google Inc. rose $11.77, or 2.3 percent, to an all-time high of $518.84. The search leader signed an agreement with Salesforce.com Inc. to cooperate on online advertising.
Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where volume came to 1.51 billion shares, compared to 1.34 billion on Monday.
The Russell 2000 index of smaller companies was down 6.84, or 0.80 percent, at 848.25.
Crude oil futures for July delivery fell 60 cents to $65.61 a barrel on the New York Mercantile Exchange.
Overseas, China’s benchmark Shanghai Composite Index rebounded 2.6 percent after plummeting 8.3 percent a day earlier. Japan’s Nikkei 225 index rose 0.45 percent. Britain’s FTSE 100 fell 0.47 percent, Germany’s DAX index dropped 0.71 percent, and France’s CAC-40 decreased 0.77 percent.
Monday, June 4, 2007
U.S. Stocks Rise, S&P 500 Climbs Most in Six Weeks; Dell Gains
By Michael Patterson
June 2 (Bloomberg) -- U.S. stocks resumed their record- breaking rally and the Standard and Poor's 500 Index climbed the most in six weeks on takeovers, earnings that topped analysts' estimates and signs that economic growth is accelerating.
Real-estate shares led the S&P 500 to three straight records after Lehman Brothers Holdings Inc. and Tishman Speyer Properties LP agreed to buy U.S. apartment developer Archstone-Smith Trust for $13.5 billion. Dell Inc. and Ciena Corp. pushed a gauge of computer-related shares to the highest since August 2001 after the companies said profit gains were fueled by rising sales.
Better-than-expected first-quarter earnings and more than $1.1 trillion of announced mergers and acquisitions this year helped the S&P 500 eclipse its 2000 peak and lifted the Dow Jones Industrial Average to its 26th all-time high. Reports this week on employment, consumer spending and manufacturing signaled that the U.S. economy is rebounding from the weakest growth in more than four years without fueling inflation.
``What we're really doing is navigating this rather tight road of strong-enough economic growth to support continued earnings gains, but not so strong that inflation becomes a problem,'' said Mark Jordahl, who helps oversee about $73 billion as chief investment officer at First American Funds in Minneapolis.
Economy Watch
The S&P 500 climbed 1.4 percent to 1536.34, the best weekly gain since the period ended April 20. The index completed its best May since 2003 and surpassed its previous record of 1527.46 reached March 24, 2000.
The Dow average rose 1.2 percent to 13,668.11. The Nasdaq Composite Index, which gets more than two-fifths of its value from computer-related shares, jumped 2.2 percent to 2613.92 for its first weekly advance in a month. Exchanges were closed May 28 for the Memorial Day holiday.
The Commerce Department said gross domestic product, the value of all goods and services produced, grew at an annual rate of 0.6 percent in the first quarter, the weakest increase since the last three months of 2002.
Other reports this week suggested last quarter may have been the low point of the economy's expansion.
Employers added 157,000 jobs in May, the Labor Department said, nearly twice the previous month's rate. Economists surveyed by Bloomberg News had expected 132,000. The jobless rate stayed at 4.5 percent, close to a five-year low.
Manufacturing, Fed Minutes
Personal spending rose 0.5 percent in April and the gauge of inflation most closely watched by the Federal Reserve rose 0.1 percent, less than the 0.2 percent gain forecast in a Bloomberg survey.
That left the inflation measure with a gain of 2 percent from April 2006. Fed officials, including Chairman Ben S. Bernanke, have said they'd be comfortable with a 1 percent to 2 percent range.
The Institute for Supply Management's factory index rose to 55 in May, the highest in 13 months, from 54.7 in April.
Minutes released this week from the Fed's rate-setting Open Market Committee showed policy makers expect economic growth to pick up and approach its ``trend rate'' next year.
``The employment numbers looked pretty good -- consumers continue to spend,'' said Hans Olsen, who oversees $2.4 billion as chief investment officer at Bingham Legg Advisers LLC in Boston. ``All told, we're lining up for a very good second quarter earnings season.''
More Takeovers
About $63 billion in announced mergers and acquisitions this week added to this year's record pace of takeovers.
Archstone-Smith surged 11 percent to $61.57. Tishman Speyer, the New York-based real-estate investor, and Lehman agreed to buy Archstone for $60.75 a share, the companies said in a statement.
A gauge of real-estate companies in the S&P 500 rose 6.9 percent. Simon Property Group Inc. gained 6 percent to $108.02. Equity Residential jumped 7 percent to $50.89.
Dow Jones & Co., publisher of the Wall Street Journal, surged 18 percent to $61.20 for the top gain in the S&P 500. The Bancroft family said it will consider other bidders and options for the company while agreeing to meet with Rupert Murdoch's News Corp. to discuss his $60-a-share bid. The Bancrofts' Dow Jones shares give them 64 percent of the votes.
Avaya Inc. rose 18 percent to $16.08 for the second-best gain in the S&P 500. Silver Lake Partners is in talks about a buyout of the world's biggest maker of corporate telephone equipment, according to the Wall Street Journal. Avaya spokesman Jim Finn and Matt Benson, spokesman for Silver Lake, declined to comment.
``There's a liquidity boom out there globally that's putting a floor under markets,'' said Sean Clark, who helps manage $1.3 billion as chief investment officer at Clark Capital Management in Philadelphia. ``We think there's lots of room for stocks to move higher.''
Earnings Top Estimates
Dell jumped 5 percent to $27.30, its highest level since November 2006. First-quarter profit excluding some costs was 36 cents a share, topping the average 27-cent estimate in a Bloomberg survey of analysts. Sales totaled $14.6 billion, compared with the $14.1 billion anticipated by analysts.
The company said it raised average selling prices of its products by 14 percent and slashed procurement costs. Dell also will cut about 8,800 jobs.
Ciena Corp. jumped 16 percent to $34.92. The maker of computer-networking equipment had second-quarter profit and sales that topped analysts' estimates as phone companies including BT Group Plc boosted spending to make their systems faster.
Technology shares in the S&P 500 extended a five-day rally and climbed 2 percent for the second-best performance among 10 industry groups.
About 66 percent of the 483 S&P 500 companies that reported first-quarter results beat analysts' estimates, according to data compiled by Bloomberg. Earnings climbed 11.6 percent on average, more than three times analysts' estimates in March.
Wal-Mart Stores Inc., the world's biggest retailer, rose the most in 19 months after saying it will buy back as much as $15 billion in stock. The buyback equals as much as 7.4 percent of its stock outstanding.
At its annual meeting, the company also said it will build fewer stores than it previously predicted. The shares added 5.5 percent to $49.47 for the best advance in the Dow industrials.
To contact the reporter on this story: Michael Patterson in New York at mpatterson10@bloomberg.net .
Last Updated: June 2, 2007 11:46 EDT
June 2 (Bloomberg) -- U.S. stocks resumed their record- breaking rally and the Standard and Poor's 500 Index climbed the most in six weeks on takeovers, earnings that topped analysts' estimates and signs that economic growth is accelerating.
Real-estate shares led the S&P 500 to three straight records after Lehman Brothers Holdings Inc. and Tishman Speyer Properties LP agreed to buy U.S. apartment developer Archstone-Smith Trust for $13.5 billion. Dell Inc. and Ciena Corp. pushed a gauge of computer-related shares to the highest since August 2001 after the companies said profit gains were fueled by rising sales.
Better-than-expected first-quarter earnings and more than $1.1 trillion of announced mergers and acquisitions this year helped the S&P 500 eclipse its 2000 peak and lifted the Dow Jones Industrial Average to its 26th all-time high. Reports this week on employment, consumer spending and manufacturing signaled that the U.S. economy is rebounding from the weakest growth in more than four years without fueling inflation.
``What we're really doing is navigating this rather tight road of strong-enough economic growth to support continued earnings gains, but not so strong that inflation becomes a problem,'' said Mark Jordahl, who helps oversee about $73 billion as chief investment officer at First American Funds in Minneapolis.
Economy Watch
The S&P 500 climbed 1.4 percent to 1536.34, the best weekly gain since the period ended April 20. The index completed its best May since 2003 and surpassed its previous record of 1527.46 reached March 24, 2000.
The Dow average rose 1.2 percent to 13,668.11. The Nasdaq Composite Index, which gets more than two-fifths of its value from computer-related shares, jumped 2.2 percent to 2613.92 for its first weekly advance in a month. Exchanges were closed May 28 for the Memorial Day holiday.
The Commerce Department said gross domestic product, the value of all goods and services produced, grew at an annual rate of 0.6 percent in the first quarter, the weakest increase since the last three months of 2002.
Other reports this week suggested last quarter may have been the low point of the economy's expansion.
Employers added 157,000 jobs in May, the Labor Department said, nearly twice the previous month's rate. Economists surveyed by Bloomberg News had expected 132,000. The jobless rate stayed at 4.5 percent, close to a five-year low.
Manufacturing, Fed Minutes
Personal spending rose 0.5 percent in April and the gauge of inflation most closely watched by the Federal Reserve rose 0.1 percent, less than the 0.2 percent gain forecast in a Bloomberg survey.
That left the inflation measure with a gain of 2 percent from April 2006. Fed officials, including Chairman Ben S. Bernanke, have said they'd be comfortable with a 1 percent to 2 percent range.
The Institute for Supply Management's factory index rose to 55 in May, the highest in 13 months, from 54.7 in April.
Minutes released this week from the Fed's rate-setting Open Market Committee showed policy makers expect economic growth to pick up and approach its ``trend rate'' next year.
``The employment numbers looked pretty good -- consumers continue to spend,'' said Hans Olsen, who oversees $2.4 billion as chief investment officer at Bingham Legg Advisers LLC in Boston. ``All told, we're lining up for a very good second quarter earnings season.''
More Takeovers
About $63 billion in announced mergers and acquisitions this week added to this year's record pace of takeovers.
Archstone-Smith surged 11 percent to $61.57. Tishman Speyer, the New York-based real-estate investor, and Lehman agreed to buy Archstone for $60.75 a share, the companies said in a statement.
A gauge of real-estate companies in the S&P 500 rose 6.9 percent. Simon Property Group Inc. gained 6 percent to $108.02. Equity Residential jumped 7 percent to $50.89.
Dow Jones & Co., publisher of the Wall Street Journal, surged 18 percent to $61.20 for the top gain in the S&P 500. The Bancroft family said it will consider other bidders and options for the company while agreeing to meet with Rupert Murdoch's News Corp. to discuss his $60-a-share bid. The Bancrofts' Dow Jones shares give them 64 percent of the votes.
Avaya Inc. rose 18 percent to $16.08 for the second-best gain in the S&P 500. Silver Lake Partners is in talks about a buyout of the world's biggest maker of corporate telephone equipment, according to the Wall Street Journal. Avaya spokesman Jim Finn and Matt Benson, spokesman for Silver Lake, declined to comment.
``There's a liquidity boom out there globally that's putting a floor under markets,'' said Sean Clark, who helps manage $1.3 billion as chief investment officer at Clark Capital Management in Philadelphia. ``We think there's lots of room for stocks to move higher.''
Earnings Top Estimates
Dell jumped 5 percent to $27.30, its highest level since November 2006. First-quarter profit excluding some costs was 36 cents a share, topping the average 27-cent estimate in a Bloomberg survey of analysts. Sales totaled $14.6 billion, compared with the $14.1 billion anticipated by analysts.
The company said it raised average selling prices of its products by 14 percent and slashed procurement costs. Dell also will cut about 8,800 jobs.
Ciena Corp. jumped 16 percent to $34.92. The maker of computer-networking equipment had second-quarter profit and sales that topped analysts' estimates as phone companies including BT Group Plc boosted spending to make their systems faster.
Technology shares in the S&P 500 extended a five-day rally and climbed 2 percent for the second-best performance among 10 industry groups.
About 66 percent of the 483 S&P 500 companies that reported first-quarter results beat analysts' estimates, according to data compiled by Bloomberg. Earnings climbed 11.6 percent on average, more than three times analysts' estimates in March.
Wal-Mart Stores Inc., the world's biggest retailer, rose the most in 19 months after saying it will buy back as much as $15 billion in stock. The buyback equals as much as 7.4 percent of its stock outstanding.
At its annual meeting, the company also said it will build fewer stores than it previously predicted. The shares added 5.5 percent to $49.47 for the best advance in the Dow industrials.
To contact the reporter on this story: Michael Patterson in New York at mpatterson10@bloomberg.net .
Last Updated: June 2, 2007 11:46 EDT
Japanese Bonds Drop for Second Week on Improving U.S. Economy
By Issei Morita
June 2 (Bloomberg) -- Japan's government bonds fell for a second week, pushing yields to the highest in seven months, on speculation export demand from the U.S. will be supported as the economy recovers from a slowdown.
Japanese bonds due in 10 years or more last month handed investors the biggest loss in almost a year, according to a Merrill Lynch & Co. index. Benchmark 10-year bonds declined as reports this week showed U.S. consumer confidence and business activity increased, adding to expectations the economy will rebound from the slowest quarterly growth in more than four years.
``Japan's bond yields finally started to rise and investors are reluctant now to buy,'' said Satoshi Kon, who helps oversee the equivalent of about $19 billion in Japanese debt at the Pension Fund Association, which has more than 1,600 corporate funds as members. ``There is a widespread expectation that the U.S. economy is now rebounding.''
Benchmark 10-year bond yields rose 5 basis points this week to 1.77 percent in Tokyo, according to Japan Bond Trading Co., the nation's largest interdealer debt broker. The yield on the 1.7 percent bond due March 2017 climbed as high as 1.775 percent, the most since Oct. 26.
The yield on the five-year note touched 1.375 percent, the highest since August. A basis point is 0.01 percentage point.
Worst Return
Japanese bonds maturing in 10 years or longer handed investors a loss of 0.9 percent in May, the worst return since June last year, when they incurred a loss of 1.5 percent, according to the Merrill Lynch index.
Ten-year yields rose 13 basis points last month, less than half the advance of similar-maturity U.S. Treasury yields. The spread between 10-year Japanese and U.S. yields was 3.15 percentage points yesterday, compared with the average of 3.04 points in the past year.
``Yields overseas are high on economic optimism, and Japan's yields have room to catch up,'' said Xinyi Lu, chief strategist of the international treasury division at Mizuho Corporate Bank Ltd. in Tokyo.
Large Redemption
The decline in bonds was limited by speculation buying in the secondary market will increase this month as more debt will mature than the Ministry of Finance is scheduled to sell.
``This month we have a large redemption coming,'' said Maki Shimizu, a bond strategist at UBS Securities Japan Ltd. in Tokyo. The extra demand for bonds may push the 10-year yield down to 1.7 percent by the end of next week, she said.
Redemption of maturing bonds and purchases by the central bank and Ministry of Finance will remove 3.2 trillion yen ($26.2 billion) of government debt from the market this month, according to calculations by Mitsubishi UFJ Securities Co.
Japan's bonds also fell this week on concern the central bank will raise borrowing costs as early as next quarter, said Akio Kato, senior portfolio manager at Kokusai Asset Management Co. in Tokyo. Government reports this week showed the jobless rate dropped to a nine-year low and household spending rose for a fourth month.
Bank of Japan Governor Toshihiko Fukui said last month that even with prices falling the risk of excessive investment might be a reason to raise interest rates. The bank key overnight lending rate is 0.5 percent.
Fukui's recent comments have ``reminded us that the BOJ's willingness to increase rates is very firm,'' Kokusai's Kato said. The bank will increase rates as early as August, he said.
The gap in yields between two- and 20-year bonds narrowed to 1.15 percentage points on May 30, the least since July 2003, according to data compiled by Bloomberg using compound yields.
Bond futures for June delivery declined 0.57 this week to 132.86 on the Tokyo Stock Exchange.
To contact the reporter on this story: Issei Morita in Tokyo at imorita@bloomberg.net .
Last Updated: June 1, 2007 18:51 EDT
June 2 (Bloomberg) -- Japan's government bonds fell for a second week, pushing yields to the highest in seven months, on speculation export demand from the U.S. will be supported as the economy recovers from a slowdown.
Japanese bonds due in 10 years or more last month handed investors the biggest loss in almost a year, according to a Merrill Lynch & Co. index. Benchmark 10-year bonds declined as reports this week showed U.S. consumer confidence and business activity increased, adding to expectations the economy will rebound from the slowest quarterly growth in more than four years.
``Japan's bond yields finally started to rise and investors are reluctant now to buy,'' said Satoshi Kon, who helps oversee the equivalent of about $19 billion in Japanese debt at the Pension Fund Association, which has more than 1,600 corporate funds as members. ``There is a widespread expectation that the U.S. economy is now rebounding.''
Benchmark 10-year bond yields rose 5 basis points this week to 1.77 percent in Tokyo, according to Japan Bond Trading Co., the nation's largest interdealer debt broker. The yield on the 1.7 percent bond due March 2017 climbed as high as 1.775 percent, the most since Oct. 26.
The yield on the five-year note touched 1.375 percent, the highest since August. A basis point is 0.01 percentage point.
Worst Return
Japanese bonds maturing in 10 years or longer handed investors a loss of 0.9 percent in May, the worst return since June last year, when they incurred a loss of 1.5 percent, according to the Merrill Lynch index.
Ten-year yields rose 13 basis points last month, less than half the advance of similar-maturity U.S. Treasury yields. The spread between 10-year Japanese and U.S. yields was 3.15 percentage points yesterday, compared with the average of 3.04 points in the past year.
``Yields overseas are high on economic optimism, and Japan's yields have room to catch up,'' said Xinyi Lu, chief strategist of the international treasury division at Mizuho Corporate Bank Ltd. in Tokyo.
Large Redemption
The decline in bonds was limited by speculation buying in the secondary market will increase this month as more debt will mature than the Ministry of Finance is scheduled to sell.
``This month we have a large redemption coming,'' said Maki Shimizu, a bond strategist at UBS Securities Japan Ltd. in Tokyo. The extra demand for bonds may push the 10-year yield down to 1.7 percent by the end of next week, she said.
Redemption of maturing bonds and purchases by the central bank and Ministry of Finance will remove 3.2 trillion yen ($26.2 billion) of government debt from the market this month, according to calculations by Mitsubishi UFJ Securities Co.
Japan's bonds also fell this week on concern the central bank will raise borrowing costs as early as next quarter, said Akio Kato, senior portfolio manager at Kokusai Asset Management Co. in Tokyo. Government reports this week showed the jobless rate dropped to a nine-year low and household spending rose for a fourth month.
Bank of Japan Governor Toshihiko Fukui said last month that even with prices falling the risk of excessive investment might be a reason to raise interest rates. The bank key overnight lending rate is 0.5 percent.
Fukui's recent comments have ``reminded us that the BOJ's willingness to increase rates is very firm,'' Kokusai's Kato said. The bank will increase rates as early as August, he said.
The gap in yields between two- and 20-year bonds narrowed to 1.15 percentage points on May 30, the least since July 2003, according to data compiled by Bloomberg using compound yields.
Bond futures for June delivery declined 0.57 this week to 132.86 on the Tokyo Stock Exchange.
To contact the reporter on this story: Issei Morita in Tokyo at imorita@bloomberg.net .
Last Updated: June 1, 2007 18:51 EDT
Sunday, June 3, 2007
Japan's Stocks Advance, Paced by Automakers; Toyota Rises
By Makiko Suzuki
June 1 (Bloomberg) -- Japanese shares gained, led by automakers, on speculation Toyota Motor Corp.'s U.S. sales rose in May and that the company will report higher-than-estimated earnings for the first three months of this business year.
Denso Corp. and Aisin Seiki Co., Toyota affiliates that make auto parts, jumped. Nippon Mining Holdings Inc. and Mitsui & Co. advanced after prices of crude oil and metals climbed.
``Investors bought Toyota on speculation it will post first-quarter earnings that are much better than the company forecast,'' said Mitsushige Akino, who oversees the equivalent of $470 million at Ichiyoshi Investment Management Co. in Tokyo. ``Commodity shares are also on a rising trend helped by a more optimistic outlook on oil and metals prices.''
The Nikkei 225 Stock Average added 83.13 or 0.5 percent, to 17,958.88. The Topix index rose 12.20, or 0.7 percent, to 1767.88.
Toyota jumped 160 yen, or 2.2 percent, to 7,460, leading gains by automakers. Denso, Japan's biggest auto-parts maker which is 23 percent owned by Toyota, advanced 60 yen, or 1.4 percent, to 4,330. Aisin Seiki, an affiliate of Toyota which makes transmissions and clutches, climbed 100 yen, or 2.4 percent, to 4,210.
Toyota probably moved closer in May to ending Ford Motor Co.'s 76-year reign as the second-biggest seller of automobiles in the U.S.
Toyota Sales
Ford's sales may have dropped in May for a seventh straight month and Toyota's probably rose, analysts surveyed by Bloomberg said. Through April, Ford's lead in U.S. sales had narrowed to 50,242 vehicles from 232,922 after the first four months last year. Automakers report U.S. sales later today.
Toyota forecast its smallest profit increase in a decade on May 9, citing slowing U.S. growth and investments in new factories. The carmaker said net income will probably rise by only 0.4 percent for this business year and North American sales gains may slow to 1.6 percent from 15.1 percent last year.
Nippon Mining, which made almost 80 percent of its sales from oil refining, advanced 29 yen, or 2.7 percent, to 1,099. Mitsui & Co., which trades industrial fuel and metals, jumped 70 yen, or 2.9 percent, to 2,470. Sumitomo Metal Mining Co., the nation's largest non-ferrous metal producer, rose 135 yen, or 4.9 percent, to 2,910.
Crude oil for July delivery advanced 0.8 percent to $64.01 a barrel yesterday and the July contract for copper jumped 2.8 percent. Oil was recently at $64.16 in after-hours electronic trading.
Dell's Earnings
Technology-related shares gained after Dell Inc., the world's No. 2 personal computer maker, posted earnings that beat analyst estimates.
Advantest Corp., the world's biggest maker of memory-chip testing equipment, climbed 80 yen, or 1.5 percent, to 5,280. NEC Corp., Japan's largest personal computer maker, added 6 yen, or 1 percent, to 626.
``Solid earnings in the U.S. will also encourage investors to buy technology shares and I bet those stocks will lead indexes once benchmarks start to have a big rally,'' said Ichiyoshi's Akino.
Dell surged as much as 8.3 percent in extended trading in New York after reporting that its first-quarter profit and sales exceeded analyst estimates and said it will cut 10 percent of its staff.
Ratings Raised
Mitsubishi Corp., Japan's biggest trading company which sells industrial fuel and coking coal, jumped 115 yen, or 3.9 percent, to 3,080 after Goldman, Sachs & Co. recommended investors buy the stock, citing a better outlook for prices of coking coal. The brokerage had a ``neutral'' rating before. Mitsubishi was the most actively traded stock by value, with 124.7 billion yen ($1.02 billion) in shares changing hands.
Kajima Corp., Japan's biggest general contractor by sales, surged 23 yen, or 4.6 percent, to 519. Taisei Corp., the nation's second largest, climbed 16 yen, or 4 percent, to 417. Credit Suisse Group raised its rating on the stocks to ``outperform'' from ``neutral'' and recommended investors increase their allocation of funds to contractors to the same proportion as in benchmarks.
Takeda Pharmaceutical Co., Japan's No. 1 drugmaker by revenue, gained 130 yen, or 1.6 percent, to 8,300. Nikko Citigroup Ltd. lifted its 12-month share-price estimate to 9,200 yen from 8,900 yen.
Nikkei futures expiring in June rose 0.5 percent to 17,950 in Osaka and gained 0.5 percent to 17,940 in Singapore.
The Nikkei advanced 2.7 percent this week, the first back- to-back weekly gains since February 23. The Topix added 3.1 percent.
Advantest Corp. (6857 JT)
Aisin Seiki Co. (7259 JT)
Denso Corp. (6902 JT)
Kajima Corp. (1812 JT)
Mitsubishi Corp. (8058 JT)
Mitsui & Co. (8031 JT)
NEC Corp. (6701 JT)
Nippon Mining Holdings Inc. (5016 JT)
Sumitomo Metal Mining Co. (5713 JT)
Taisei Corp. (1801 JT)
Takeda Pharmaceutical Co. (4502 JT)
Toyota Motor Corp. (7203 JT)
To contact the reporter for this story: Makiko Suzuki in Tokyo at Msuzuki13@bloomberg.net
Last Updated: June 1, 2007 02:39 EDT
June 1 (Bloomberg) -- Japanese shares gained, led by automakers, on speculation Toyota Motor Corp.'s U.S. sales rose in May and that the company will report higher-than-estimated earnings for the first three months of this business year.
Denso Corp. and Aisin Seiki Co., Toyota affiliates that make auto parts, jumped. Nippon Mining Holdings Inc. and Mitsui & Co. advanced after prices of crude oil and metals climbed.
``Investors bought Toyota on speculation it will post first-quarter earnings that are much better than the company forecast,'' said Mitsushige Akino, who oversees the equivalent of $470 million at Ichiyoshi Investment Management Co. in Tokyo. ``Commodity shares are also on a rising trend helped by a more optimistic outlook on oil and metals prices.''
The Nikkei 225 Stock Average added 83.13 or 0.5 percent, to 17,958.88. The Topix index rose 12.20, or 0.7 percent, to 1767.88.
Toyota jumped 160 yen, or 2.2 percent, to 7,460, leading gains by automakers. Denso, Japan's biggest auto-parts maker which is 23 percent owned by Toyota, advanced 60 yen, or 1.4 percent, to 4,330. Aisin Seiki, an affiliate of Toyota which makes transmissions and clutches, climbed 100 yen, or 2.4 percent, to 4,210.
Toyota probably moved closer in May to ending Ford Motor Co.'s 76-year reign as the second-biggest seller of automobiles in the U.S.
Toyota Sales
Ford's sales may have dropped in May for a seventh straight month and Toyota's probably rose, analysts surveyed by Bloomberg said. Through April, Ford's lead in U.S. sales had narrowed to 50,242 vehicles from 232,922 after the first four months last year. Automakers report U.S. sales later today.
Toyota forecast its smallest profit increase in a decade on May 9, citing slowing U.S. growth and investments in new factories. The carmaker said net income will probably rise by only 0.4 percent for this business year and North American sales gains may slow to 1.6 percent from 15.1 percent last year.
Nippon Mining, which made almost 80 percent of its sales from oil refining, advanced 29 yen, or 2.7 percent, to 1,099. Mitsui & Co., which trades industrial fuel and metals, jumped 70 yen, or 2.9 percent, to 2,470. Sumitomo Metal Mining Co., the nation's largest non-ferrous metal producer, rose 135 yen, or 4.9 percent, to 2,910.
Crude oil for July delivery advanced 0.8 percent to $64.01 a barrel yesterday and the July contract for copper jumped 2.8 percent. Oil was recently at $64.16 in after-hours electronic trading.
Dell's Earnings
Technology-related shares gained after Dell Inc., the world's No. 2 personal computer maker, posted earnings that beat analyst estimates.
Advantest Corp., the world's biggest maker of memory-chip testing equipment, climbed 80 yen, or 1.5 percent, to 5,280. NEC Corp., Japan's largest personal computer maker, added 6 yen, or 1 percent, to 626.
``Solid earnings in the U.S. will also encourage investors to buy technology shares and I bet those stocks will lead indexes once benchmarks start to have a big rally,'' said Ichiyoshi's Akino.
Dell surged as much as 8.3 percent in extended trading in New York after reporting that its first-quarter profit and sales exceeded analyst estimates and said it will cut 10 percent of its staff.
Ratings Raised
Mitsubishi Corp., Japan's biggest trading company which sells industrial fuel and coking coal, jumped 115 yen, or 3.9 percent, to 3,080 after Goldman, Sachs & Co. recommended investors buy the stock, citing a better outlook for prices of coking coal. The brokerage had a ``neutral'' rating before. Mitsubishi was the most actively traded stock by value, with 124.7 billion yen ($1.02 billion) in shares changing hands.
Kajima Corp., Japan's biggest general contractor by sales, surged 23 yen, or 4.6 percent, to 519. Taisei Corp., the nation's second largest, climbed 16 yen, or 4 percent, to 417. Credit Suisse Group raised its rating on the stocks to ``outperform'' from ``neutral'' and recommended investors increase their allocation of funds to contractors to the same proportion as in benchmarks.
Takeda Pharmaceutical Co., Japan's No. 1 drugmaker by revenue, gained 130 yen, or 1.6 percent, to 8,300. Nikko Citigroup Ltd. lifted its 12-month share-price estimate to 9,200 yen from 8,900 yen.
Nikkei futures expiring in June rose 0.5 percent to 17,950 in Osaka and gained 0.5 percent to 17,940 in Singapore.
The Nikkei advanced 2.7 percent this week, the first back- to-back weekly gains since February 23. The Topix added 3.1 percent.
Advantest Corp. (6857 JT)
Aisin Seiki Co. (7259 JT)
Denso Corp. (6902 JT)
Kajima Corp. (1812 JT)
Mitsubishi Corp. (8058 JT)
Mitsui & Co. (8031 JT)
NEC Corp. (6701 JT)
Nippon Mining Holdings Inc. (5016 JT)
Sumitomo Metal Mining Co. (5713 JT)
Taisei Corp. (1801 JT)
Takeda Pharmaceutical Co. (4502 JT)
Toyota Motor Corp. (7203 JT)
To contact the reporter for this story: Makiko Suzuki in Tokyo at Msuzuki13@bloomberg.net
Last Updated: June 1, 2007 02:39 EDT
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