Nikkei Rises on Yen's Decline, PM's Challenger Calls Americans 'Simple-Minded'
Exuberance over a fall in the value of the yen today overshadowed gloomy economic data coming out of the U.S. Japan investors were greeted by the news that Prime Minister Kan has a new opponent in the upcoming September elections, Ichiro Ozawa (pictured). Ozawa stepped down as leader of the Democratic Party of Japan over a campaign funding scandal last year, and has endured similar accusations in the past.
Some worry that Ozawa's challenge will destabilize the economy, which is suffering from a meteoric rise in the value of the yen. The yen had reached a 15-year high, but weakened to 84.82 to the dollar today. Ozawa's announcement was preceded by his headline-making comments at a seminar yesterday. "I like Americans, but they are somewhat monocellular," he said. "When I talk with Americans, I often wonder why they are so simple-minded." Not a comment likely to pave the way for smooth relations.
Investors searching for bargains scooped up shares in Yahoo Japan, sending it surging 5.7%. Softbank, Yahoo Japan's biggest shareholder, also caught the wave, soaring 3%. Dentsu, a Japanese advertising company, jumped 3.1%.
Car companies, which benefit directly from a fall in the value of the yen when they repatriate their earnings, closed mostly higher. Honda leaped 1.8% and Fuji Heavy Industries, maker of the Subaru, rose 1.5%. Toyota and Nissan were both up 0.6%. Carmakers that lost today included Isuzu, which plunged 2.5% and Mazda, which declined 0.5%.
A drop in cargo rates sent shares in shipping companies lower. Nippon Yusen Kabushiki Kaisha tumbled 1.2%, Mitsui OSK Lines sank 1.1% and Kawasaki Kisen Kaisha fell 0.9%.
In Hong Kong, shipping companies also lost value. China Cosco Holdings dropped 3.3%, Pacific Basin Shipping slumped 3.2% and China Shipping Container Lines declined 2.1%.
Ju Teng International, a Hong Kong-listed computer casing manufacturer, nosedived 15.8% after Citigroup slashed its rating on the company to sell. Another big loser was watch company Hengdeli Holdings fell 7%. The company sells internationally branded watches including Swatch, the once omnipresent watch that's now disappeared from many department store counters, and Omega. Hengdeli now plans to sell 300 million shares to raise funds, according to Bloomberg.
China Life slumped 6.3% after Citigroup declared the insurer's first half earnings to be weak, reports Bloomberg, especially as compared with rival insurance companies.
Big gains were made by clothing maker Trinity, which manufactures upmarket menswear under labels like Gieves & Hawkes, Cerruti 1881 and Kent and Curwen. The tailor jumped 9.4% in today's trading, while its parent company Li & Fung, which also makes trendy garb for the likes of Wal-Mart and Abercrombie, advanced 1.3%. Esprit fell 1.8%.
In China coalminers advanced after Beijing released information saying the consolidation of the coal-mining industry would be accelerated. China Coal Energy leaped 1.5% and Shenhua rose 0.5%. Shares in companies like Jiangxi Copper advanced as investors looked for bargains. After declining yesterday, Jiangxi Copper gained 2.1% today, and Aluminum Corp. of China added 0.5%.