Japan 01 (May 08 - Dec 09)

[winston]

From kennynah with thanks:-

04 Jun 2008 10:58 GMT

JAPAN: Data released in Japan Wednesday,

** Q1 non-financial firms capex -4.9% y/y vs -7.7% in Q4

- Q1 non-fincl firms current profits -17.5% y/y vs -4.5% Q4

- Q1 manufacturer capex +0.9% y/y vs +0.5% Q4

- Q1 non-manufacturer capex -7.8% vs Q4 -12.0%

[kennynah]

15 Jun 2008 09:17 GMT
Six dead, 100 hurt as quake strikes Japan

KURIHARA, Japan (Thomson Financial) - A powerful earthquake tore up hills, fields and roads in northern Japan on Saturday, killing at least six people, injuring around 100 more and trapping guests at a levelled resort hotel.

The earthquake, which measured 7.2 on the Richter scale, also caused a small leak of radioactive water from a power plant, although the company said there was no cause for public concern.

Japan deployed nearly 800 troops to the largely agricultural region in Miyagi and Iwate prefectures, where military helicopters plucked to safety residents, many of them elderly, who were suddenly cut off from the world.

Landslides snapped highways, which abruptly turned into cliffs of falling mud and dirt, and clogged rivers to create a series of "quake lakes."

"I was driving my car when the earthquake hit," said Makoto Katsurashima, 72. "I just turned white as I saw the road disappear before my eyes a few metres (yards) away."

The quake, which struck just eight kilometres (five miles) underground, was strong enough to shake buildings in Tokyo, 350 kilometres (220 miles) to the south, and was followed by around 160 aftershocks.

Dozens of residents flocked in the evening to makeshift shelters set up in public buildings, either out of fright or because power and running water were cut off to their homes.

"The top priority is to save lives," Prime Minister Yasuo Fukuda said in Tokyo as he dispatched the military and his disaster minister. "We're doing our best in rescue operations."

Six people were killed and another 90 were injured, officials said, while public broadcaster NHK put the number of injured at 162.

((truncated))

[kennynah]

17 Jun 2008 02:44 GMT
BULLET: JGBS: Japanese government bond prices rose in trade..

JGBS: Japanese government bond prices rose in morning trade due to short-covering following firmer US Treasuries, but the price gains were limited:

-- Benchmark 10-year yield was 1.5 bps lower at 1.860%

-- 2-year yield was 3.5 bps lower at 0.925%

-- 5-year yield was 4.5 bps lower at 1.450%

-- 20-year yield was 0.5 bps lower at 2.395%

-- 30-year bonds untraded

[winston]

Japan's Stocks Set for Inflation-Led Climb, CLSA Says (Update2)
By Patrick Rial and Toshiro Hasegawa

June 20 (Bloomberg) -- Japanese stocks are on the verge of a bull run as the fastest consumer-price inflation in a decade prompts individuals and institutions to shift funds into equities from lower-yielding bonds and deposits, according to CLSA Ltd.

``Inflation is going to trigger three things: One is a shift from bonds to equities, two is a consumer boom'' and three is improved profitability for manufacturers, Russell Napier, a strategist with brokerage CLSA, said at a seminar in Tokyo today.

The benchmark Topix stock index surged 20 percent to yesterday from a three-year low on March 17, outperforming the world's 10 largest markets. Japan's government said on April 25 that inflation, excluding energy and food prices, rose 0.1 percent in March, the first increase since August 1998.

Accelerating inflation may spur households to move some of their 1,500 trillion yen ($14 trillion) of assets into stocks to counter the erosion of wealth from higher prices, said Napier, 43, also author of the 2005 book ``Anatomy of the Bear: Lessons from Wall Street's Four Great Bottoms.''

Japanese insurance companies hold 9 percent of their assets in equities, compared with 26 percent for U.S. insurers, while households hold only a quarter as much of their wealth in stocks as their U.S. counterparts, according to CLSA.

``Investors will move their funds out of bonds and into stocks to hedge against inflation,'' said Hiromichi Tsuyukubo, a hedge-fund manager in Tokyo at Myojo Asset Management Japan Co., which oversees $200 million. ``That process has already begun.''

Inflation Hindering Growth?

The effect of inflation on investors' risk appetite may be outweighed by higher prices stunting consumption and eating into corporate profits, eroding the appeal of equity investments.

``When companies raise prices to pass on costs, they end up not being able to sell their products,'' said Seki Obata, an associate professor of finance at Keio Business School. ``Japan's problem is that the underlying economy is still weak.''

A Bank of Japan survey found that households anticipate prices will go up by more than 7 percent in the next 12 months. Japan Post Bank, the nation's largest lender, pays savers 0.21 percent yearly interest on deposits, not enough to cover the decrease in purchasing power.

Investors in Japanese shares have moved to an ``almost neutral'' holding compared with net 18 percent being ``underweight'' last month, according to Merrill Lynch & Co.'s June fund manager survey. The weighting reflects their equity holdings relative to stock benchmarks.

``The change to inflation will get financial assets moving, and we could see stock valuations bid up,'' said Mitsuhiro Nakashizu, a managing director at Asahi Life Investment Co. in Tokyo, which oversees about $10 billion in assets. Japan's deflation over the past decade caused consumers to delay purchases and slowed economic growth, Nakashizu said.

The bull run will be sparked by investors shifting funds into stocks, and later supported by a consumer spending boom, Napier said.

[millionairemind]

June 27, 2008, 9.42 am (Singapore time)
Latest update
Japan inflation hits 10-yr high, consumption slips

TOKYO - Japan's annual consumer inflation accelerated to a decade-high in May on surging energy costs, and household spending dipped as the job market stagnated, darkening the outlook for the world's second-largest economy.

Industrial production rebounded in the month, but the government cut its assessment to say output was 'slightly weak though it remains in a flat trend'.

Soaring oil and food prices have been blamed for dampening corporate profits and consumer sentiment as well as complicating monetary policy at the Bank of Japan (BOJ), whose key policy rate is already low at 0.5 per cent. Many analysts expect the central bank to keep interest rates on hold this year.

'If the BOJ raises interest rates to beat inflation, that would further worsen the economy,' said Takeshi Minami, chief economist at Norinchukin Research Institute.

'As such, the central bank won't be able to hike rates until companies are able to pass on rising costs to consumers and earn enough to boost wages,' he added.

The Nikkei stock average fell 2 per cent, with exporters such as Toyota Motor Corp sliding after US stocks plunged on record high oil prices. But the yen was little moved, trading around 106.80 yen to the dollar.

The core consumer price index (CPI), which excludes volatile fresh food prices but not other food products or oil prices, rose 1.5 per cent in May from the same month last year, data showed on Friday, above a consensus market forecast for a 1.4 per cent rise.

It was the biggest annual inflation rise since March 1998.

After hovering below zero per cent for most of 2007, core CPI has stayed around 1 per cent this year due to spikes in oil prices, which surged nearly 4 per cent to a record over US$140 a barrel on Thursday.

Rising energy and raw material prices have been squeezing corporate profits and slowing Japan's growth. Reflecting this trend, the BOJ's tankan corporate survey due next Tuesday is expected to show a sharp fall in business sentiment.

Consumer are also feeling the pain as the availability of jobs dips to the lowest level in three years.

The jobs-to-applicants ratio fell to 0.92 in May, meaning 92 jobs were available per 100 applicants, down from 0.93 in April but matching the market consensus, while the unemployment rate stayed at 4 per cent in May.

Worried about rising food and energy costs, consumers kept tightening their purse strings. Household spending fell 3.2 per cent in May from a year earlier, below a median market forecast for a 2.2 per cent drop, other data showed.

'All in all, the data suggests that Japan's economy has entered a clear downtrend in the second quarter,' said Junko Nishioka, Japan economist at ABN Amro Securities.

Although solid exports to China and other emerging economies have supported Japan's growth so far, economists expect the economy to contract slightly in the April-June quarter.

Industrial output - a key gauge of the strength of manufacturers - rose 2.9 per cent in May from a month earlier, slightly above the median market forecast of 2.7 per cent rise. -- REUTERS

[winston]

I'm starting to see some articles recommending the Japanese Stock market. I now have Japan on my watchlist. At this point, the only Japanese play that I have is Saizen Reit listed in SGX.

==================================================

Cheapest in a Quarter-Century!
By Dr. Steve Sjuggerud

A new mega-bull market is about to emerge... in something. Typically, in new bull markets, the themes that worked the last time around don't work anymore... Instead, new themes take over. Sectors of stocks that have done nothing for years start rising, for no apparent reason.

The thing is, nothing is emerging yet. If it ain't energy (the "old" theme), it ain't working.

We've taken stabs at a few things outside of energy... only to prove what we should already have known: It's too early at this point – and therefore too dangerous – to try to "guess" who the new bull-market leaders will be.

As low-risk investors, we'd rather not catch a falling knife. We should let it hit the ground and bounce around a bit before we pick it up.

One interesting "falling knife" is Japan...

Today, Japanese stocks are cheaper than they've been at any time in the last quarter-century...

You have to go back to the beginning of 1983 to find price-to-earnings ratios and price-to-book values this low... and dividend yields this high.

If you were bold enough to buy Japanese stocks at the beginning of 1983, and hold them for seven years, you'd have made five times your money... The Nikkei – Japan's main stock index – started 1983 at 8,000 and closed 1989 near 39,000.

Just to give you an idea of what that means, consider the Dow Jones Average in the States... Today it's around 12,000. Can you imagine it rising to just under 60,000 in seven years? That's how much Japanese stocks moved starting in 1983, the last time they were this cheap.
Capital One Fncl Corp.

Of course, Japan was undergoing an extraordinary transformation at the time. And it had to pay for that spectacular move higher... It's now nearly 20 years after the peak. And the market is still down more than 50%! The Nikkei bottomed most recently at around 12,000 in mid-March. Today it's closer to 14,000. So we might just be seeing the start of an uptrend here...

When you size it up under our True Wealth lens, Japan is:

1) The cheapest it's been in over a quarter-century.
2) Ignored, because it's performed so darn badly for so darn long.
3) Quite possibly in the beginning of an uptrend.

Bold speculators could step in today. A broad-market index fund for Japan (like EWJ) is the simplest way to go. Smaller stocks are even cheaper than the ones in the broad index. But speculators could get burned now...

Look, if this is truly the beginning of a major bull market in Japan, like 1983 to 1989, then we don't have to be the first ones in. We're conservative. We'll give it just a little more time to develop... to prove itself. Right now, we have no particular catalyst... and no uptrend. So we're in no hurry.

It's not often you get to say something is the cheapest it's been in a quarter-century. But you can say that about Japanese stocks today.

Someday soon, we'll be buying Japanese stocks.

[winston]

Financial Times: Longer-term trends looking positive for Japanese stocks

“… the Nikkei has certainly been displaying remarkable resilience of late. The FTSE Global index ex-Japan has lost 9% since the tentative rally was viciously reversed in mid-May. The Nikkei is down less than 3%.

“The weaker yen has helped. For example, consumer goods, much of which are exported, account for a quarter of the Nikkei’s capitalisation.

“Another reason the Nikkei has outperformed is that investors believe Japan’s banking system has emerged relatively unscathed from the subprime crisis.

“Whether this was the fortuitous result of a need to sort out their own balance sheets after the 1990s slump or a strategic decision not to dive headlong into the credit party, the upshot is they are now healthy enough to pick up stakes in struggling foreign institutions. The US banking sector is off 21% since mid-May, Japan’s 7.5%.

“Longer-term trends look more positive. Agitation to improve corporate governance is gathering pace. Companies are increasing dividends and buybacks, says Dr Seiichiro Iwasawa, chief equity strategist at Nomura, who adds that, although high oil prices have traditionally hurt Japanese stocks, the country is the most energy-efficient in the world.

“But for the Japanese market to maintain a good bull run, it will be necessary for Mrs Watanabe to add more domestic stocks to the family portfolio instead of seeking returns abroad.

“And today’s confirmation that, after years of deflation, inflation in Japan continues to rise will remind consumers that shares can go up as well as down.”

Source: Jamie Chisholm, Financial Times, June 26, 2008.

[millionairemind]

Before one rushes out to buy Japanese stocks, just sharing something which I have noticed. The Japanese stock mkt flows with the Yen/USD exchange rate, believe it or not. When USD weakens considerably, the Nikkei would tank. Go back to March this year when Yen/USD broke 100 and you will see what I mean.

My simple opinion is that Nikkei consists of quite a number of exporters. Every drop in the exchange rate (strengthening of the Yen) reduces the earnings when converted back to Yen. Go back to mid March and you can see the effect of the exchange rates on Nikkei 225.

The yen's strength causes little jubilation in Japan. A strong yen squeezes company profits since Japan is heavily dependent on exports. Toyota, for example, bases its earnings on an exchange rate of ¥105: every ¥1 appreciation against the dollar costs the firm ¥35 billion ($350m) in annual operating profit. Back in March the strengthening of the Yen hurts the Nikkei 225, which has tumbled even faster than the yen climbs; by mid-March it has shed more than 20% since the start of the year. Moreover, a strong yen cuts into economic growth.

[kennynah]

ok...have you guys ever wondered why there are so many young Japanese girls willing to act in AV films?

[blid2def]

Well, at least they're making money - better than those who do home videos and don't actually collect a fee.