Tokyo stocks muted after tankan pump


Brazil and team captain Cafu lifted the trophy, but the winners on the economic front are far from clear

By Alex Frew McMillan

HONG KONG, China (CNN) -- Japan's Topix closed up a little over one-third of a percent on Monday, fueled by a record tankan report. Australia and New Zealand also gained.

Markets in South Korea and Hong Kong were closed Monday.

Taiwan's market fell heavily, down more than 3.5 percent on electronics stocks and Eva Airways. Singapore is lower heading towards the close.

Tokyo's other main index, the Nikkei, also closed lower, down 0.25 percent at 10,595.44.

The Topix ended up 0.36 percent at 1028.63. Japan had a heavy day of economic data, with the Bank of Japan's tankan survey of business confidence showing its strongest one-quarter leap on record (full story).

Yen set for more intervention?

The tankan suggests that the yen will gain even more ground against the U.S. dollar. It has already been on a rip since February.

As a result, electronics maker Sony Corp. fell 2.21 percent to 6190 yen. It saw little benefit from sales of its large-screen televisions during the soccer World Cup.


The yen barely budged after the tankan and remains below 120 to the dollar

Other tech and export-oriented stocks eased. But big banks closed higher in Tokyo.

Hong Kong's markets were closed for the July 1 holiday to mark the 1997 handover of the former British colony to China (full story).

South Korea's stock market was closed in honor of the soccer World Cup tournament. That ended Sunday night in Yokohama, Japan, with a 2-0 victory to Brazil over Germany.

Many ethnically Japanese Brazilians cheered the result, as did Brazil fans worldwide (full story).

It is unclear yet whether either South Korea or Japan showed a net economic gain from the World Cup.

Cup evidence inconclusive

"The only thing we're interested in is whether the events had an impact on consumer spending," J.P. Morgan economist Ryo Hino told CNN.


Brazil fans as far afield as Freiburg, Germany, cheered the victory but Japan and Korea have to use 20 stadiums

"I don't think the evidence is that conclusive," he said. The cost of building the 20 stadiums used in the tournament may never be recouped.

Japan's yen hardly budged on the strong tankan report. It is trading at 119.46 in early European trade Monday, even though a stronger economy would suggest a stronger currency.

"Market participants are waiting for intervention as an opportunity to sell USD/JPY," Bank of America stated in a report.

Fresh figures show that foreign-exchange transactions in Japan totaled 2.27 trillion yen ($19.0 billion) in June.

"The bulk of this amount was a result of the government's currency intervention in that period, when it bought dollars in a bid to stem the appreciation of the yen," J.P. Morgan noted.

Taiwan down on airline grant

Volume was thin in Tokyo, after the end of the soccer tournament. In Taiwan, the Taiex fell heavily, down 3.58 percent to 4969.32. That is almost a seven-month low.

Electronics stocks accounted for most of the slump, that subindex falling 3.83 percent. AU Optronics was the most-active stock in Taipei.

The third-largest maker of computer monitors in the world fell the 7 percent limit to T$29.30.

Eva Airways, the island's second-largest carrier, fell 6.6 percent to T$12.70 after it did not win as many new flights to Hong Kong as the market expected.

Mandarin Airlines, a private company, won the right to enter as a third local carrier. Eva won 33 new flights and more cargo capacity.

News Corp. up on sunny media outlook

In Australia, the S&P/ASX 200 closed up 0.37 percent at 3227.9. Market heavyweight News Corp. came off last week's three-year low.

The media company roared ahead 7.8 percent to A$10.43. Its peer media companies also gained in U.S. trading on Friday.

Sydney's second-largest listing, Telstra, closed up 2.2 percent at A$4.76, after buying out the 40 percent stake in Hong Kong mobile company CSL held by PCCW. Telstra already had the other 60 percent(Full Story).

New Zealand's Top 40 rose 0.17 percent to 2,071.78. The gain came on the back of Telecom New Zealand, up 1.8 percent to NZ$5.02.

Singapore's index is down about 0.7 percent in mid-afternoon trade.