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Banks soar in Japan but Asia dips
By Alex Frew McMillan
HONG KONG, China (CNN) -- Japanese stocks gained on Wednesday ahead of a key report on the banks, due for release late in the day. The Nikkei average closed up 0.55 percent at 8,756.59, while heady gains in bank stocks drove the broader Topix up 0.87 percent to 870.23. But there were losses for most of the rest of Asia, with South Korean stocks down more than 2 percent. Taiwan's market lost more than 1 percent and Australia closed slightly lower. New Zealand edged ahead. Hong Kong also ended with a slim loss, but Singapore recovered to close with a gain. BOJ injects more cash into JapanIn Tokyo, the market closed much as it ended the morning, locking in financial-stock gains. It was also digesting a series of earnings. Just before the close, the central Bank of Japan raised its target for current-account deposits to between 15 and 20 trillion yen, from 10 to 15 trillion yen. It also increased its monthly purchase of Japanese government bonds to 1.2 trillion yen, from 1.0 trillion yen. (BOJ makes its moves) Both steps are designed as ways of easing monetary policy, at a time interest rates are already almost at zero, and pumping more money into the economy. Bank stocks leaped ahead of Financial Services Minister Heizo Takenaka's report, due in the evening.
UFJ Holdings topped the yen gains with a gain of 20,000 yen, for a 12.9 percent leap to 175,000 yen. Mizuho Holdings, the world's biggest bank by assets, surged 7.36 percent to 175,000 yen. The market was pricing in the likelihood of compromise on the bank report, which was postponed last week amid staunch opposition from ruling-party lawmakers. "Koizumi and Takenaka appear to have caved in to pressure on banking reform," ING Barings Chief Economist Richard Jerram said in a report. The idea of tackling banks' deferred-tax assets, often cited as padding, seems dead, Jerram said, and leaks suggest there will be no move to drive a recapitalization of the banks. "We can probably consign the rest of the package to the dustbin containing all the other packages of the past decade," Jerram stated. "We are now looking at a continuation of the procrastination of the past decade, with the associated deflation and poor economic performance." Toyota down ahead of figuresOn the earnings front, Toyota Motor posted a 90.2 percent rise in net profit for the half year, to a record 553.8 billion yen. (Full story) Its shares fell 1.5 percent to 2,955 yen ahead of the figures. But Honda Motor, which has sunk heavily since earnings on Monday, rebounded with a 3.2 percent rise to 4,520 yen. Other carmakers closed flat. Electronics maker Matsushita Electric Industrial Co. posted net profit of 17.85 billion yen ($145 million) for the September quarter. (Full report) Its stock rose 1.4 percent to 1,303 yen ahead of the figures. The company said its recovery is on track. Canon rose 3.47 percent to 4,470 yen after coming in with a net profit increase of more than 50 percent for the September quarter the day before. Chip- and computer maker Fujitsu slumped 7.0 percent to 412 yen after its bearish outlook in releasing earnings, also on Tuesday. (Full story) The yen is stronger at 122.98 to the U.S. dollar in late Tokyo trade. Korea falls on U.S. confidenceIn South Korea, the Kospi fell 2.25 percent to 658.03, hurt by a decline in U.S. consumer confidence. (Full story) That had edged the Nasdaq 1.16 percent lower on Tuesday, to 1,300.54. But the Dow Jones industrial average ended steady, with a 0.01 percent rise to 8,368.94. (Full story) On Wednesday in Seoul, Samsung Electronics fell 4.25 percent to 338,000 won as overseas investors sold out. Rival memory chipmaker Hynix Semiconductor crunched 8.9 percent lower to 460 won. Chohung Bank climbed 2.9 percent to 4,845 won as U.S. fund Newbridge Capital said it plans to bid for a majority stake through Korea First Bank. Taiwan down ahead of UMC's numbersTaiwan's Taiex fell 1.22 percent to 4,498.73 as heavyweight United Microelectronics Corp. (UMC) reported. Chip foundry UMC fell 3.54 percent to T$24.50 ahead of its earnings. It said it returned to a profit for the third quarter, from a loss the same time last year. (Full story) Larger rival TSMC fell 2.78 percent to T$45.50 after reporting last week. (Full story) Screenmaker Au Optronics was also off, down 3.3 percent to T$20.50. But China Airlines again jumped the daily 7 percent limit to T$15.60 on the likelihood of direct transport links to mainland China. Banks prop up Sydney marketIn Australia, the S&P/ASX 200 index closed virtually flat, with a 0.17 percent loss to 3,006.2. Banks rose, propping the market ahead of a likely cut in U.S. interest rates next week. NAB climbed 0.8 percent to A$33.65. Mining stocks were down with demand looking lackluster on the poorer U.S. confidence figures. BHP Billiton fell 2.6 percent to A$9.39, while Rio Tinto was off 3.2 percent to A$31.22. News Corp. dropped 3.1 percent to A$10.42. Retailer Coles Myer dipped 0.78 percent after its boardroom tussle took a new twist. (Full story) Agriculture companies are still reeling from the effects of a tough drought. GrainCorp ended off 3.3 percent to A$8.70 after cutting its crop forecast by 43 percent. In New Zealand, the Top 40 finished with a 0.14 percent gain to 2,015.50. Telecom New Zealand lifted 0.20 percent to NZ$5.07. Wood products company Carter Holt Harvey was also higher, up 1.89 percent to NZ$1.62. China telecom plays off again in HKHong Kong's Hang Seng index closed down 0.77 percent at 9,560.46. The market's Chinese telecom plays fell again, with investors selling down positions to make way for China Telecom's stock offering next month. China Unicom was down 3.92 percent to HK$4.90, and China Mobile fell 2.72 percent to HK$19.65. U.S.-leaning plays also fell on the decline in confidence there. Clothing shipper Li & Fung dropped 3.66 percent to HK$7.90, while small-motor maker Johnson Electric dropped 1.16 percent to HK$8.60. China's largest brewer, Tsingtao, climbed 2.74 percent to HK$3.75 as it reported an almost 70 percent jump in net profit for the first nine months. (Full story) Singapore's Straits Times index ended up 0.62 percent at 1,458.96, after trading lower much of the day. Banks DBS Group and OCBC both recovered from earlier losses to end flat. Singapore Airlines ended up 3.70 percent at S$11.20 on word airlines are putting a surcharge on cargo from Asia to the U.S. west coast.
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