Golden Fibonacci

By Ron Harui

Aug. 31 (Bloomberg) — The yen strengthened for a fifth day against the euro after the opposition Democratic Party of Japan won the nation’s weekend general elections, spurring optimism the new government may stimulate the economy.

Japan’s currency gained versus all 16 major counterparts after public broadcaster NHK said the DPJ, led by 62-year-old Yukio Hatoyama, captured at least 308 of the 480 lower-house seats, spurring speculation overseas investors will purchase Japanese assets. The dollar rose for a second day against the pound before a U.S. report that economists say will show the nation’s business activity contracted at a slower pace in August.

“There are expectations that foreigners may flock to Japanese securities such as equities, given the DPJ’s victory,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe Generale SA, France’s third-largest bank. “The yen is likely to appreciate.” Ream more »

By Wes Goodman

Aug. 28 (Bloomberg) — Treasuries fell as a gain in Asian stocks cut demand for the relative safety of government debt and investors sought higher yields from corporate bonds.

Pacific Investment Management Co., which runs the world’s biggest bond fund, said today that Asian bank securities “look attractive” as markets recover from the financial crisis. Kokusai Global Sovereign Open Fund, Asia’s biggest bond fund, and Western Asset Management Co. both said this week that the best value is outside the government debt markets.

“Treasury yields are too low,” said Kazuaki Oh’e, a bond salesman in Tokyo at Canadian Imperial Bank of Commerce, the nation’s fifth-biggest bank. “The economy is recovering.”

The yield on the 10-year note rose two basis points to 3.47 percent as of 9:35 a.m. in Tokyo, according to BGCantor Market Data. The 3.625 percent security maturing in August 2019 dropped 5/32, or $1.56 per $1,000 face amount, to 101 9/32.

MSCI’s Asia Pacific Index of regional shares rose 0.5 percent and is set for a 2.7 percent weekly advance.

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.

Aug. 26 (Bloomberg) — Purchases of new homes in the U.S. jumped more than forecast and demand for long-lasting goods such as autos and computers climbed, reinforcing signs the economy is rebounding from the worst recession since the 1930s.

Home sales increased 9.6 percent in July, the most in four years, to a 433,000 annual pace, figures from the Commerce Department showed today in Washington. Another report from the department indicated bookings for durable goods climbed 4.9 percent, also exceeding forecasts and the most since July 2007.

Government efforts to thaw credit markets and revive demand are stemming the biggest housing slump since the Great Depression. Economists at Morgan Stanley were among those lifting growth estimates for this quarter after the report on orders signaled business investment was also picking up. Ream more »

By Masaki Kondo and Toshiro Hasegawa

Aug. 26 (Bloomberg) — Japanese stocks rose as a gain in U.S. consumer confidence and a smaller-than-estimated drop in home values outweighed falling prices for metals and oil.

Toyota Motor Corp., the world’s biggest automaker, added 1.5 percent, and Yamaha Motor Co. rose 1.4 percent. Inpex Corp., Japan’s largest oil and gas explorer, slid 0.9 percent.

“The housing and confidence reports cemented evidence that the U.S. economy is recovering,” said Hiroichi Nishi, an equities manager at Tokyo-based Nikko Cordial Securities Inc. “Ahead of Japan’s national election on Sunday, some investors will take profits if markets stay high.”

The Nikkei 225 Stock Average increased 0.4 percent to 10,543.51 as of 9:03 a.m. in Tokyo. The broader Topix index rose 0.5 percent to 969.54. Ream more »

Aug. 25 (Bloomberg) — Japanese stocks declined on concern that prices exceeded the prospects for company earnings after the Nikkei 225 Stock Average rose yesterday by the most in more than three months.

Bridgestone Corp., a tiremaker that trades at 234 times estimated earnings, slumped 1.8 percent. Nippon Meat Packers Inc. fell 2.1 percent after having risen the most in five months yesterday. NGK Insulators Ltd. advanced 5.3 percent after the Nikkei newspaper reported the company will supply rechargeable batteries to Abu Dhabi.

“There will be a reversal from yesterday’s big gain,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. Equities “have gone too high and this is a time for investors to book profit.”

The Nikkei 225 Stock Average lost 0.4 percent to 10,542.35 as of 9:38 a.m. in Tokyo. The broader Topix index fell 0.2 percent to 968.08, with nine stocks declining for every five that rose. Ream more »

By Masaki Kondo and Toshiro Hasegawa

Aug. 24 (Bloomberg) — Asian stocks rose, led by commodities producers, after prices for copper and oil increased and sales of existing homes in the U.S. surged the most on record.

BHP Billiton Ltd., the world’s biggest mining company, gained 3.1 percent in Sydney, and Mitsubishi Corp., a Japanese trading company that gets more than a third of its sales from commodities, advanced 3.6 percent in Tokyo. Hyundai Motor Co., South Korea’s largest automaker, climbed 5.8 percent in Seoul after the company named Chung Eui Sun as a vice chairman.

The MSCI Asia Pacific Index rose 1.6 percent to 112.33 as of 9:15 a.m. in Tokyo, with almost 20 times as many stocks advancing as retreating. Japan’s Nikkei 225 Stock Average added 2.7 percent to 10,514.97, with no stocks falling. Benchmark gauges in South Korea, Australia and New Zealand climbed. Ream more »

By Masaki Kondo

Aug. 21 (Bloomberg) — Japanese stocks fell, led by automakers after the U.S. government said it will close the “cash for clunkers” vehicle trade-in program.

Honda Motor Co., Japan’s No. 2 carmaker, retreated 2.3 percent, and larger rival Toyota Motor Corp. lost 2.2 percent. Mitsui O.S.K. Lines Ltd., the nation’s No. 2 shipping line, slid 1.6 percent after a gauge of commodity-transport rates extended its decline for a third day. Kobe Steel Ltd. jumped 2.8 percent after the Nikkei newspaper said it may develop technology needed to produce components for nuclear reactors.

The Nikkei 225 Stock Average slid 0.8 percent to 10,302.45 as of 9:26 a.m. in Tokyo. The broader Topix index lost 0.6 percent to 952.80, with automakers collectively contributing the most to the decline.

For the week, the Nikkei is headed for a 2.8 percent drop, while the Topix is poised to lose 1.5 percent. Both gauges are set to mark their first weekly slumps since the five days ended July 10.

The “cash for clunkers” program offers car buyers discounts of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles. U.S. Transportation Secretary Ray LaHood said the program will close on Aug. 24 after having recorded transactions valued at $1.9 billion in rebates.

The Baltic Dry Index, a measure of commodity-shipping rates, dropped for a third session yesterday with a 3.1 percent decline.

Nikkei futures expiring in September fell 0.6 percent to 10,300 in Osaka and Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

Aug. 20 (Bloomberg) — The Swiss government said it plans to sell its 6 billion-franc investment in UBS AG, the country’s biggest bank, by today after signing an agreement with the U.S. yesterday over data on bank clients suspected of evading taxes.

The government gave a mandate to three Swiss and foreign banks to sell 332.2 million UBS shares, securing a certain minimum price, Peter Siegenthaler, director of the federal finance administration, said in a telephone interview. He declined to identify the banks or the minimum price, saying the state expects to make a “significant profit.”

The Swiss Confederation will waive its right to receive future coupons on the mandatory convertible notes for a cash amount of approximately 1.8 billion Swiss francs, representing the present value of the future coupon payments, UBS said.

The Swiss government last year invested 6 billion Swiss francs ($5.6 billion) in mandatory convertible notes to help Zurich-based UBS split off toxic assets amid the worst economic crisis since the Great Depression. Yesterday’s settlement of a U.S. lawsuit that sought data on as many as 52,000 UBS clients and the bank’s 3.8 billion-franc capital increase in June strengthened confidence in the bank, the government said. Ream more »

By Kayla Carrick and Stuart Wallace

Aug. 18 (Bloomberg) — U.S. stocks rose, helping global equities rebound from the worst drop since April, following better-than-estimated earnings at Home Depot Inc. and Target Corp. Crude oil rose for the first time in three days, while Treasuries and the dollar fell.

The MSCI World Index added 1.1 percent at 4:05 p.m. in New York, with 20 of 23 developed markets advancing. The Standard & Poor’s 500 Index climbed 1 percent to 989.67 as financial, commodity and technology companies led gains.

“This is a bull market, and it will continue to do OK,” said Craig Hodges, a fund manager at Dallas-based Hodges Capital Management Inc., which oversees about $750 million. “There are necessary corrections you need in order for it to stay healthy. It’s a tug of war.”

The advance in equities today restored less than half of yesterday’s 2.8 percent slump in the MSCI World Index. The global benchmark index has rallied 52 percent from a 13-year low in March on speculation the worst of the global recession is over. The Dow Jones Industrial Average gained 82.6 points, or 0.9 percent, to 9,217.94 today. Europe’s Dow Jones Stoxx 600 Index added 1.3 percent after German investor confidence increased. Ream more »

By Patrick Rial

Aug. 18 (Bloomberg) — Most Japanese stocks fell for a second day as concern mounted that a five-month rally in global stocks made shares expensive and as commodities prices slumped.

Mizuho Financial Group Inc., Japan’s third-biggest bank by market value, sank 2.2 percent. Softbank Corp., the nation’s third-largest mobile-phone operator, lost 1.7 percent after Mizuho cut the stock’s rating. Mitsui & Co., the country’s second-largest trading company, tumbled 3.2 percent. NGK Spark Plug Co. rose 4.8 percent, helping to limit declines, after JPMorgan Chase & Co. recommended buying the shares.

The Topix index fell 0.2 percent to 947.57 as of 9:24 a.m. in Tokyo, with more than twice as many stocks retreating as advancing. The Nikkei 225 Stock Average was little changed at 10,277.64. Ream more »