Japan Nikkei 225 index ends year down 11%, first loss in 5 years...

Discussion in 'Wall St. News' started by crgarcia, Dec 28, 2007.

  1. Nikkei ends 2007 down 11 pct, first loss in 5 yrs

    Fri Dec 28, 2007 12:47am EST

    By Aiko Hayashi

    TOKYO, Dec 28 (Reuters) - The Nikkei average ended 2007 with a loss for the year of 11 percent on Friday, its first fall in five years and making Tokyo the world's worst-performing major stock market.

    The market reached its high for the year in February but was overshadowed by booming markets and vibrant economies elsewhere in Asia and in recent months has been dogged by the U.S. subprime problems and resultant credit crunch.

    The year's final trading day in Friday saw exporters such as Canon Inc (7751.T: Quote, Profile, Research) among the main drags on the market, with investors discouraged by a firmer yen and worries about the subprime issues and the U.S. economy's outlook.

    "The market ended as if to symbolise the year's trade -- subprime," said Hitoshi Yamamoto, chief executive officer at Fortis Asset Management Japan.

    "This looks like a warning by the market that the subprime problem will continue into the new year and won't be solved easily."

    Tokyo stocks also fell out of favour because foreign investors were disappointed by Japanese firms' mindset such as a willingness to adopt anti-takeover measures and the government's slowness in implementing structural reforms, Yamamoto said.

    In 2006 the benchmark Nikkei .N225 gained 6.9 percent, boosted by expectations of mergers and acquisitions among Japanese firms. Continued...

  2. Nikkei 225 Down another 4% today(1/4/08), their first trading day of year.

    Analysts said Tokyo stocks were playing catch up to weaker global equity markets in its first trading day of 2008 since shuttering for extended holidays last Friday.

    "Japan was closed over the last few days when other markets were falling, so they have to catch up with the downside," said Yoji Takeda, a fund manager with RBC Investment Management Asia in Hong Kong . "Basically there wasn't much incentive to buy.. it was a panicky sell-off."

    Takeda added the broader market was pressured by a stronger yen and weaker U.S. economic data over the past week, which raised worries exporters may face twin headwinds of seeing their goods rise in price at a time global economic growth is decelerating.

    Market watchers said sentiment toward Japanese equities has also taken a reality check in over recent months after the government revised lower its economic growth forecast to 1.3% from 2.1% for the fiscal year that began in April 2007.
    "The valuation is basically cheap now, it has been sold down to level which is the bottom of a historic valuation," Takeda said.