Wednesday, February 27, 2008

Asian Stocks Records a drop for the first time in the week as Yen strengthen against Dollar

by Michelle Roberts

Stocks in Asia recorded a drop for the first time in the current week and the drop was led by the fall in the stocks of automakers and finance institutions. The Yen of Japan also consolidated against the dollar and Goldman Sachs JBWere cut down its prediction of share prices on the Australian Banks, these developments triggered the fall of stocks in the Asian stock markets. The losses in Tokyo were led by Toyota Motor Corporation following a three week high of the Yen against the dollar which led to the erosion in the value of foreign sales.

Fanuc Ltd. of Japan also backed up following the double drop in the speed of the country’s factory production. The drop in the pace was double than economists had estimated. The highest drop in two weeks was recorded for the National Australia Bank Ltd. The greater interest rates as well as sluggish growth for bank profits are plaguing the finance stocks says Hans Kunnen, who is responsible for managing $128 billion with Colonial First State Global Asset Management in Sydney. The MSCI Asia Pacific Index dropped by 0.3% to 148.14 and this stopped the 4.1% growth for almost three days in Tokyo. The standard rates increased by 13% on Wednesday after it had reached its 14 month record on the 22nd of January. The Nikkei 225 Stock Average of Japan declined by 0.7% to 13,939.50 which was its retreat from a six month record gain. Australia’s standard S and P/ASX 200 dropped by almost 1.8% which was the highest drop in the Asian stocks. Suncorp-Metway Ltd. Australia’s number two insurer for car and home tumbled in the stocks following the decrease in its profits, while trading in Taiwan did not take place due to a holiday.

Many of the stocks of the US also suffered a decline particularly in the shares of utility and drug maker which were overshadowed by estimates that Ben S. Bernanke, the Federal Reserve Chairman was likely to cut down interest rates. The 500 Index of Standard and Poor also kept on moving from gains and losses for as many as 25 times and finally stopped at 0.1%. The biggest auto manufacturer of Japan, Toyota declined by 2.5% to 5,910 yen which was the highest in the week, while the second largest auto maker of Japan Honda Motor Co. fell by 2.9% to 3,340 Yen. About a third of sales for Toyota came from North America whereas Honda was able to have sale of greater than half of the sales recorded by Toyota in the same region in the last financial year.

The Japanese Yen at the close of trading in Tokyo on Wednesday strengthened against the dollar by 105.96 in New York from its earlier 107.06. Currencies in other Asian countries like South Korea, Australia, Thailand, Malaysia, Singapore and China also got stronger against the dollar.

 

 

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