Nikkei Surged Following Gains From US Markets

Yen traded mostly flat while Nikkei surged after US stock market rally yesterday helping equity markets throughout the world rise. Bond yields climbed too as investors shifted money in riskier assets.


NextWave to Buy 69.23% Stake in Japan’s IPMobile:
NextWave Wireless Inc., a provider of mobile communication technology, agreed to buy a stake in IPMobile Inc. to start a high-speed wireless network in Japan this year. Mori Trust Co., a closely held Japanese property developer, will sell its entire 69.23 percent stake in IPMobile to San Diego-based NextWave, the Tokyo-based real-estate company said in a statement today. Shoko Mori, a spokeswoman at Mori Trust, and Roy Burger, NextWave’s executive vice president of marketing, declined to provide financial details.
Typhoon Heads for Japan’s Kyushu, Flights Canceled:
Typhoon Man-Yi swept across Japan’s southern islands of Okinawa and headed for Kyushu with winds as high as 247 kilometers an hour (154 miles per hour), forcing airlines to cancel flights that stranded more than 41,000 people. The eye of Man-Yi was 50 kilometers from the town of Nago on the main island of Okinawa at 1 p.m. Japanese time today, the Japan Meteorological Agency said on its Web site. The storm is moving north at 20 kilometers an hour over Okinawa prefecture, which has a population of 1.4 million people.
Opposition leads in opinion polls at start of Japan’s parliamentary campaign:
Japan’s main opposition party was ahead of the ruling bloc in a public opinion poll released Friday, a day after campaigning kicked off in a heated parliamentary election that could trigger political instability in the world’s second-largest economy. About 28 percent of the survey’s respondents said they would vote for the main opposition Democratic Party of Japan, while only 21 said they would support Prime Minister Shinzo Abe’s ruling Liberal Democratic Party, according to the Yomiuri newspaper poll.
Source: International Herald Tribune
Yen did not show much action against the US dollar and continued to trade near a record low against the Euro today as no economic data was released. USDJPY gained marginally however, indicating investors continued borrowing in Japan and investing in high-yielding countries. As of 3:00am New York the pair was trading 122.44. The BOJ kept the benchmark interest rate at 0.50% this week maintaining the same tone that it still awaits stronger indication of economic growth before any rate hike. Traders today saw a 71 percent chance of a rate rise in August based on swap rates provided by Credit Suisse Group.

Nikkei surged 254 points today following the 2.1% gain in the Dow Jones Industrial Average and better than expected sales by US retailers reduced concerns that housing slump will significantly affect consumer spending. The gains were further paced by falling Yen which increased expectations of higher profits of export companies. Electronic makers also advanced after South Korea?s newspaper reported that billionaire Carl Icahn might be planning a takeover bid for Samsung Electronics. Nikkei gained 5 percent this week closing at 18,238.95. Nikkei futures expiring in September climbed 1.1 percent to 1783.20.

Bonds fell again today as global rally in the stock market persuaded investors to shift money in the riskier assets. Yields on the 10-year bonds climbed 3.2 basis points closing at 1.930 percent for the day. Ten-year bond futures for September delivery declined 0.29 to 131.51 on the Tokyo Stock Exchange.