16 theSun | WEDNESDAY JANUARY 28 2009

business

Asian shares gain, Tokyo

leaps on govt rescue
TOKYO: Japanese shares led Asian markets
higher, climbing 4.9% after Tokyo launched
a US$16.7 billion (RM60.12 billion) scheme
yesterday to help firms threatened by the
financial crisis.
In Europe, shares were expected to
open down with the focus on earnings and
a German business sentiment indicator,
with Britain’s FTSE 100 seen falling 21 to 32
points and Germany’s DAX expected down
6 to 31 points.
Japan’s funding plan helped the Nikkei
average to its biggest one-day gain in
percentage terms since mid-December,
along with a fall in the yen and a 9% surge
in shares of Honda Motor Co. The carmaker
announced further production cuts in North
America in Japan, but a newspaper reported
it would boost capacity in China.
Japan’s trade ministry said capital would
be provided only while companies faced
difficulty in fund-raising due to market tur-
moil, and firms receiving the funds would
be required to draw up plans to boost
profitability within three years.
“This news will be positive, since it’s di-
rected at firms in general and raises hopes
that this will help with fund-raising, but
the yen’s fall has helped too,” said Yutaka
Miura, senior technical analyst at Shinko
Securities.
“We’ll have good news and bad news,
just one mountain after another, before the
downside really solidifies.”
The MSCI index of Asia-Pacific stocks
outside Japan was up 1.36%, after a 0.48%
gain in the Dow Jones industrial average
and a 0.56% rise in the Standard & Poor’s
500 index on Monday.
Many Asian markets were closed for Lu-
nar New Year, but Australian shares closed
up 3% after a one-day holiday, helped by
miners such as Rio Tinto, which were bu-
oyed by a rebound in metal prices.
News of the funding plan helped push
the yen down against the dollar and deepen
its losses against the euro and sterling as
shares gained and investor risk tolerance
appeared to pick up.
The yen has tended to fall against higher
yielding currencies as investor risk appetite
improves and the currency had slipped on
Monday after a rise in US existing home
sales and British bank Barclays said it was
not seeking fresh capital.
The euro was up 0.8% at ¥118.32,
well above last week’s seven-year low of
¥112.08, while sterling, which hit a record
low last week, climbed 1% to ¥125.68. The
dollar gained 0.4% to ¥89.46.
US Treasuries edged down in Asia as
shares rallied, sapping demand for safe
haven debt, and the bond market was in
wait-and-see mood ahead of a two-day
Federal Open Market Committee meeting
which ends today.
The Fed is expected to leave the target
range for the benchmark overnight federal
funds rate unchanged at zero to 0.25% and
to flesh out new ways to free up lending.
The benchmark 10-year note fell 2/32
in price to yield 2.653%, up about 0.5 basis
point from late US trade.
Japanese government bond futures
dropped, tracking falls in Treasuries and
euro zone government bonds and dented
by the rebound in stocks from a three-
month closing low on Monday.
Analysts warned investor sentiment
could turn quickly, with layoffs continuing
and European and US corporations disclos-
ing plans to cut more than 70,000 jobs to
cope with the downturn.
Gold held steady just above US$900
(RM3,240) an ounce after a three-day rally
on safe-haven buying.
Oil prices rose more than 1%, reversing
losses as traders focused on short-term
factors, such as cold US weather and an
Australian cyclone. US light, sweet crude
for March delivery climbed back above
US$46 (RM165.60) a barrel. – Reuters

Japan to inject public

severe and the plan is unlikely to revive the
economy in the mid and long term,” said
Ishiguro.
Japanese companies have been severely
affected by the global economic downturn,
which has pushed the world’s second larg-
est economy into its first recession in seven

funds into companies

TOKYO: Japan said yesterday it would inject
public funds into ailing companies to help
them through the global economic crisis,
cheering investors who sent Tokyo share
prices soaring.
The latest effort to ease a credit crunch
in Asia’s biggest economy came as Japan’s
top securities firm Nomura Holdings posted
a quarterly loss of US$3.8 billion (RM13.68
billion) because of the financial meltdown.
In parliament, meanwhile, political wran-
gling held up the enactment of a US$54 billion
(RM194.4 billion) extra budget to fight the re-
cession as the ruling coalition and opposition
clashed over cash handouts.
Japan has already offered financial lifelines
to banks hit by the worst financial crisis since
the Great Depression.
Now it plans to channel funds to other
industries through state-backed lenders in a
scheme local media said could be worth ¥1.5
trillion (RM61.2 billion).
“The plan would ensure companies operate
smoothly,” said a trade and industry ministry
official.
Companies eligible for the bailout scheme
include major companies that are likely to
recover from the recession as well as firms
that are vital to regional economies, officials
said.
Tokyo’s Nikkei stock index soared 4.9% as
investors responded positively to the news,
which came as Washington pushed ahead with
efforts to revive the US economy, confirming
Timothy Geithner as Treasury secretary.
“Markets welcomed the plan as it would
mean that capital would flow to companies
and the economy. Fears that companies may
go bankrupt eased,” said Okasan Securities
equity strategist Hideyuki Ishiguro.
“With the US pressing ahead swiftly on its
policy measures, Japan is giving a sign that
it is moving to put its finances to work,” he
added.
But the market rally may be short-lived
as “economic conditions in general remain
years.
A survey released yesterday said 400,000
temporary workers in Japan’s manufacturing
sector are expected to lose their jobs by the
end of March.
Japan has an estimated one million non-
regular employees in the manufacturing
sector, of which 20% have already lost their
jobs, according to the joint survey by a labour
association and an outsourcing group.
Automakers are among the hardest hit.
Honda Motor Co said it would roll back pro-
duction further in Japan and North America,
although it is stepping up output in China,
where demand is still growing despite the
global economic crisis.
After the closing bell Nomura said it logged
a net loss of ¥342.9 billion for the fiscal third
quarter, against a year-earlier profit of ¥21.8
billion.
“Last quarter was extraordinary for our
industry and Nomura was no exception,” said
company president Kenichi Watanabe. “How-
ever, our financial position remains strong.”
Nomura, which last year bought swathes of
failed US investment bank Lehman Brothers,
said it lost ¥43.1 billion due to Iceland’s finan-
cial crisis and ¥32.3 billion due to exposure to
alleged Wall Street swindler Bernard Madoff.
– AFP

Japan’s NEC Tokin to shed 9,450 jobs worldwide

TOKYO: Japanese electronics maker NEC Tokin
announced yesterday that it would axe 9,450 jobs
worldwide due to the economic crisis.
The electronic component manufacturer, a
subsidiary of Japanese hi-tech giant NEC Corp,
said it would shed about 450 domestic posts
and 9,000 jobs overseas, the latest in a wave of
global layoffs.
The company currently makes electronic ma-
terials and devices with some 3,000 employees
in Japan and 16,000 in China, Thailand, the Philip-
pines and Vietnam.
“We have made the decision due to stagnant
demand following the global economic slowdown,”
company spokesman Toshiyuki Mitani said.
The company would carry out the job cuts “as
quickly as possible,” he added.
NEC Tokin revised its net loss forecast to ¥39.9
billion (RM1.602 trillion) for the current business
year to March from a ¥1.3 billion projected earlier.
– AFP