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May 24, 2013, 4:37 a.m. EDT

Japan stocks end up after roller-coaster ride

Tokyo suffers big swings after Bank of Japan chief’s remarks

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By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) — Japanese shares ended modestly higher Friday after a roller-coaster ride that subjected the Nikkei Stock Average to a swing of more than 3% on both sides of the previous day’s close.

Other regional markets ended mixed after also charting a choppy course, with Australian stocks tumbling as banks and resource stocks skidded amid concerns about the outlook for the local and Chinese economies.

The Nikkei /zigman2/quotes/210597971/delayed JP:NIK -3.67% finished the day 0.9% higher in Tokyo, a day after it plunged 7.3% for its worst drop since a disastrous earthquake and tsunami struck the country in March 2011.

After opening solidly higher, the benchmark slumped in afternoon trading on a wave of selling, as remarks from the governor of the Bank of Japan failed to ease concerns about a rise in government-bond yields. The drop coincided with a steep rise in the yen after BOJ Gov. Haruhiko Kuroda said stability in the country’s debt markets was “extremely desirable.”


Reuters

“He is trying to make money cheaper, but [the] Japanese government bond yield is going the other way, and he hasn’t said how he’s going to stabilize bond-market yield. ... That’s worrying the market,” said Kim Eng Securities director of sales trading Andrew Sullivan.

The Nikkei’s slump on Thursday had came against the backdrop of extreme volatility in the bond market, which forced the Bank of Japan to step in and offer funds to soothe investor nerves. The yield on the 10-year Japanese government bond (JGB) yield rose to 1% Thursday before recovering, even as the Bank of Japan last month announced plans to buy JGBs on an unprecedented scale — a move intended to lower yields and borrowing costs.

On Friday afternoon, the 10-year yield was at 0.835%.

However, some analysts said the bond market was functioning properly, despite worries about yields.

“We see the robust stock rally, weaker-yen trend and emerging sentiment that a 2% inflation rate within two years looks somewhat achievable as the sources of the recent yield upswing... we reject the view that the market is not functioning property,” Royal Bank of Scotland economists led by Junko Nishioka wrote in a note to clients.

They estimated that the 10-year JGB yield will move in a core range of 0.65% to 0.95% over the next six months, “with the yield trading in the upper half of this range until market volatility drops, and in the lower half once the market has settled down.”

Kim Eng’s Sullivan, meanwhile, said the severe market reaction Friday reflected investors’ unwillingness to take risks ahead of the weekend, with some key economic data due later on Friday from the U.S. and Europe.

The U.S. was slated to release numbers on monthly durable goods orders later on Friday. Germany was set to issue the result of its monthly Ifo index on business confidence.

Contributing to the stock market’s volatility, the U.S. dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -1.3670% traded in a wide range, plunging as low as ¥101.05 after rising to ¥102.58 earlier in the day.

Among the major stock movers Friday, shares of Sharp Corp. /zigman2/quotes/203224600/delayed JP:6753 -5.05%   /zigman2/quotes/200401218/delayed SHCAY +1.72%  climbed 8.2%, Tokyo Electric Power Co. /zigman2/quotes/202771076/delayed JP:9501 -3.07%   /zigman2/quotes/205839055/delayed TKECY -12.25%  jumped 9.9% and Shinsei Bank Ltd. /zigman2/quotes/210166295/delayed JP:8303 -4.20%   /zigman2/quotes/209928917/delayed SKLKF -3.58%  rose 6.5%.

On the downside, Renesas Electronics Corp. /zigman2/quotes/203872935/delayed JP:6723 -7.00% /zigman2/quotes/201351352/delayed RNECY -3.37%  dropped 2.5%, Sumitomo Mitsui Financial Group Inc. /zigman2/quotes/203656770/delayed JP:8316 -1.33%   /zigman2/quotes/206471416/composite SMFG +1.43%  shed 2.1% and Japan Real Estate Investment Corp. /zigman2/quotes/202728746/delayed JP:8952 -4.79%  retreated 4%.

/zigman2/quotes/210597971/delayed
JP : Nikkei
21,142.96
-805.27 -3.67%
Volume: 0.00
Feb. 28, 2020 3:15p
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/zigman2/quotes/210561789/realtime/sampled
US : Tullett Prebon
108.0890
-1.4980 -1.3670%
Volume: 0.0000
Feb. 28, 2020 4:59p
loading...
/zigman2/quotes/203224600/delayed
JP : Japan: Tokyo
¥ 1,260.00
-67.00 -5.05%
Volume: 4.14M
Feb. 28, 2020 3:00p
P/E Ratio
12.87
Dividend Yield
1.98%
Market Cap
¥769.67 billion
Rev. per Employee
¥50.23M
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/zigman2/quotes/200401218/delayed
US : U.S.: OTC
$ 2.95
+0.05 +1.72%
Volume: 114,723
Feb. 28, 2020 3:59p
P/E Ratio
13.75
Dividend Yield
0.99%
Market Cap
$6.21 billion
Rev. per Employee
$454,670
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/zigman2/quotes/202771076/delayed
JP : Japan: Tokyo
¥ 410.00
-13.00 -3.07%
Volume: 13.55M
Feb. 28, 2020 3:00p
P/E Ratio
3.58
Dividend Yield
N/A
Market Cap
¥656.91 billion
Rev. per Employee
¥149.25M
loading...
/zigman2/quotes/205839055/delayed
US : U.S.: OTC
$ 3.58
-0.50 -12.25%
Volume: 23,288
Feb. 28, 2020 3:59p
P/E Ratio
3.41
Dividend Yield
N/A
Market Cap
$6.09 billion
Rev. per Employee
$1.35M
loading...
/zigman2/quotes/210166295/delayed
JP : Japan: Tokyo
¥ 1,437.00
-63.00 -4.20%
Volume: 2.84M
Feb. 28, 2020 3:00p
P/E Ratio
6.23
Dividend Yield
0.70%
Market Cap
¥339.19 billion
Rev. per Employee
¥54.32M
loading...
/zigman2/quotes/209928917/delayed
US : U.S.: OTC
$ 12.92
-0.48 -3.58%
Volume: 100.00
Feb. 28, 2020 12:44p
P/E Ratio
6.09
Dividend Yield
N/A
Market Cap
$3.05 billion
Rev. per Employee
$492,101
loading...
/zigman2/quotes/203872935/delayed
JP : Japan: Tokyo
¥ 651.00
-49.00 -7.00%
Volume: 13.72M
Feb. 28, 2020 3:00p
P/E Ratio
510.11
Dividend Yield
N/A
Market Cap
¥1113.40 billion
Rev. per Employee
¥36.92M
loading...
/zigman2/quotes/201351352/delayed
US : U.S.: OTC
$ 2.96
-0.10 -3.37%
Volume: 10,121
Feb. 28, 2020 3:51p
P/E Ratio
484.75
Dividend Yield
N/A
Market Cap
$10.32 billion
Rev. per Employee
$334,299
loading...
/zigman2/quotes/203656770/delayed
JP : Japan: Tokyo
¥ 3,484.00
-47.00 -1.33%
Volume: 13.33M
Feb. 28, 2020 3:00p
P/E Ratio
6.87
Dividend Yield
5.17%
Market Cap
¥4771.22 billion
Rev. per Employee
¥79.40M
loading...
/zigman2/quotes/206471416/composite
US : U.S.: NYSE
$ 6.37
+0.09 +1.43%
Volume: 6.51M
Feb. 28, 2020 6:30p
P/E Ratio
6.84
Dividend Yield
4.44%
Market Cap
$43.62 billion
Rev. per Employee
$719,197
loading...
/zigman2/quotes/202728746/delayed
JP : Japan: Tokyo
¥ 736,000
-37,000 -4.79%
Volume: 8,941
Feb. 28, 2020 3:00p
P/E Ratio
35.93
Dividend Yield
2.81%
Market Cap
¥1019.51 billion
Rev. per Employee
N/A
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