Japanese Stocks Fall on Stonger Yen as Obama Re-Elected
Most Japanese stocks fell amid mixed earnings reports from companies including Nissan Motor Co. (7201) and Taiyo Yuden Co., and the yen strengthened after U.S. President Barack Obama won a second term in office.
Taiyo Yuden sank 2.8 percent after the maker of electronics components cut its profit forecast. Nissan jumped 4.1 percent after analysts said its forecast was conservative and that Chinese customers were returning to the carmaker’s showrooms after a territorial dispute between the two nations. Inpex Corp. (1605) rose after the oil explorer boosted its full-year forecast and crude rose the most in a month.
“The current economy isn’t sustainable enough for the drastic fiscal restructuring the Republican Party wanted,” said Masaru Hamasaki, Tokyo-based chief strategist at Toyota Asset Management Co., which manages the equivalent of $22 billion. “Obama succeeded in keeping the nation from entering a depression. Without his actions, we can’t tell how much the economy would have plunged. Obama kept a critical situation from getting worse.”
The Nikkei 225 Stock Average (NKY) was little changed at 8,972.89 at the 3 p.m. close in Tokyo after swinging between gains and losses of 0.6 percent earlier. Volume on the gauge was 5.7 percent above the 30-day intraday average. The broader Topix (TPX) Index added 0.1 percent to 745.71, with eight shares falling for every seven that gained.
Futures on the Standard & Poor’s 500 Index slid 0.3 percent today as Obama defeated Republican Mitt Romney, who conceded the presidential race after projections showed the incumbent winning the electoral votes needed for re-election.
Obama faces a so-called fiscal cliff of more than $600 billion in tax increases and spending cuts that take effect in 2013 unless Congress can reach a budget compromise.
The yen appreciated to as high as 79.81 against the dollar today in Tokyo, compared with 80.29 when the stock markets open. A stronger yen cuts overseas income at Japanese companies when repatriated.
Toyo Tire & Rubber Co., a tiremaker that gets a third of its sales in North America, declined 1.5 percent to 198 yen.
In China, the nation’s Communist Party tomorrow starts its 18th Congress in Beijing, when delegates will meet over several days to pick a new leader. Xi Jinping will probably replace Hu Jintao as general secretary of the party that’s ruled China since 1949.
The Topix has risen 3.7 percent since Sept. 6 after the European Central Bank started a global wave of stimulus to boost growth, with the U.S. Federal Reserve and the Bank of Japan following suit. Shares on the equity gauge traded at 0.9 times book value, compared with 2.2 for the S&P 500 and 1.5 for the Europe Stoxx 600 Index.
Commodity-related companies gained after crude oil for December delivery jumped 3.6 percent to settle at $88.71 a barrel in New York yesterday, the biggest gain since Oct. 4 and the highest settlement since Oct. 22. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum advanced 0.9 percent.
Inpex, the nation’s largest oil explorer by market value, climbed 2.8 percent to 457,000 yen after raising its full-year net-income forecast 8.3 percent to 182 billion yen ($2.3 million), saying crude prices rose more than expected the company assumed in August. Mitsui Mining & Smelting Co. jumped 6.2 percent to 172 yen even after cutting its earnings forecast.
Some 551 of the 1,675 Topix companies post earnings results this week. Of the 295 companies on the gauge which have reported quarterly revenue since Oct. 1 and for which Bloomberg News has estimates, 66 percent have missed projections.
Taiyo Yuden (6976) slid 2.8 percent to 623 yen after slashing its operating profit forecast by half to 5 billion yen, citing weak demand for electronic parts.
Nissan gained 4.1 percent to 705 yen after saying orders and showroom visits in China have rebounded following violent protests in several cities. Nissan Chief Operating Officer Toshiyuki Shiga said yesterday that orders there had recovered to 70 percent of normal levels and dealership traffic to 80 percent as of mid-October.
At least four analysts, including Masataka Kunugimoto of Nomura Holding Inc. who raised the target price to 880 yen from 830 yen, made positive comments even after Nissan cut its operating profit forecast 18 percent.
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