Nikkei slips as BOJ impact shortlived; worst April in 7 yrs

Japan's Nikkei share average ended lower in choppy trade and closed out its worst April since 2005 on Friday, after the Bank of Japan's move to boost its bond buying failed to ignite lasting confidence among investors over the fragile economy.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney IThe Winning Leap SME Special
Moneycontrol

Home » News » Markets » Asian markets

Apr 27, 2012, 01.15 PM | Source: Reuters

Nikkei slips as BOJ impact shortlived; worst April in 7 yrs

Japan's Nikkei share average ended lower in choppy trade and closed out its worst April since 2005 on Friday, after the Bank of Japan's move to boost its bond buying failed to ignite lasting confidence among investors over the fragile economy.

Like this story, share it with millions of investors on M3

Nikkei slips as BOJ impact shortlived; worst April in 7 yrs

Japan's Nikkei share average ended lower in choppy trade and closed out its worst April since 2005 on Friday, after the Bank of Japan's move to boost its bond buying failed to ignite lasting confidence among investors over the fragile economy.

Post Your Comments

Share Cancel

Nikkei slips as BOJ impact shortlived; worst April in 7 yrs
Japan's Nikkei share average ended lower in choppy trade and closed out its worst April since 2005 on Friday, after the Bank of Japan's move to boost its bond buying failed to ignite lasting confidence among investors over the fragile economy.

Stocks briefly picked up and the yen weakened after the BOJ announced during the afternoon session that it would increase its asset purchases by 10 trillion yen and expand buying of exchange-traded funds and real estate-linked funds.

But strategists said market participants had mostly priced in the BOJ decision and so they quickly pocketed profits ahead of a three-day weekend. Tokyo markets are closed on Monday for a national holiday.

"Markets reacted positively to the BOJ's move to expand its balance sheet by buying more risk assets such as ETFs. But in comparison to operations by overseas central banks, Japan still lacks dynamism," said Seiki Orimi, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"It's like the bank is being publicly humiliated by the government into doing more for the economy. And they're still not going far enough," Orimi said.

The benchmark Nikkei ended down 40.94 points at 9,520.89, reversing course after jumping as high as 9,691.70 shortly after the BOJ announcement.

The broader Topix slipped 0.7% to 804.27.

Trading volume spiked, with 2.19 billion shares changing hands on the main board, up from 1.56 billion shares on Thursday.

MARKET FOCUS

With the initial euphoria over the BOJ quickly fading, investors are turning their focus to domestic corporate earnings and Europe.

Highlighting some of the challenges facing Japan's blue chips this earnings season, Nintendo skidded 5.6% after it posted its first ever annual operating loss on Thursday, citing shrinking sales of its ageing Wii gaming console and weak demand for its new 3DS handheld device.

After the closing bell, Sharp Corp reported a record net loss of 376.1 billion yen for the just-ended fiscal year, hammered by weak sales of LCD panels and TVs. The stock gained 1.2% ahead of the results.

Still, the Topix's one-month earnings momentum - analysts' earnings upgrades minus downgrades as a $age of total estimates - improved further to 5.4% in April from 3.6% last month, data from Thomson Reuters I/B/E/S showed.

Nearly two-thirds of the 27 Nikkei companies that reported January-March earnings before Friday beat or met market expectations, data from Thomson Reuters StarMine showed, much better than the previous quarter.

Bucking the market, Softbank Corp surged 3.1% after it hiked its dividend to 40 yen from 5 yen after posting an operating profit of 675.3 billion yen for the year to March.

"It was certainly impressive that the BOJ decided to buy more ETFs and REITs, which was a slight surprise. But once that's out, we're all looking to tonight's Italian debt auction and GDP figures from the United States," said Kenichi Hirano, operating officer at Tachibana Securities.

Concerns over peripheral economies were sparked once again after Standard & Poor's cut Spain's credit rating by two notches and said the country's outlook could deteriorate even further unless ambitious measures were taken at the European level.

The Nikkei shed 5.6% this month, marking its worst April performance in seven years on the back of a global equities correction driven by mixed economic data out of the United States, slower growth in China and resurgence of European sovereign debt worries.

Buy, Hold, Sell ? Hear it first on M3
Nikkei slips as BOJ impact shortlived; worst April in 7 yrs

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login