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Yen Hits 8-Month High

By DailyFX Research Team
12 May 2006 09:34 GMT

Tokyo shares hit a six-week closing low Thursday, as continued yen strength caused investors to sell shares of Japan’s leading exporters.  The benchmark Nikkei 225 average closed down 0.5 percent to 16,862.14, while the broader Topix index fell 0.8 percent to 1,711.31.  Shares of Toyota, the world’s most profitable carmaker, fell 2.1 percent to Y6,540, despite the fact that the carmaker reported on Wednesday its fourth straight year of record net income and sales.  Other major exporters also lost ground. Sony fell 1.6 percent to Y5,450 and Canon fell 0.5 percent to Y8,500.  Shares of several Japanese stocks that were added to the Morgan Stanley Capital International index rose.  In total, 21 new Japanese stocks joined the MSCI Barra index, which is tracked by funds as a gauge of portfolio performance. Many funds mirror the changes made to the MSCI indices by buying stocks that have been added and selling those that are dropped. Shares of two new names were particular strong on Thursday, as Hanshin Electric Railway was up 3.7 percent to Y1,025 and Haseko, the construction company, rose 2 percent to Y456.  Shares of Don Quijote, the discount retailer, fell 7.8 percent to Y8,930.  Credit Suisse on Wednesday lowered its earnings estimates for the company in the current business year and cut its target price on the stock to Y9,200 from Y9,400 after recent price gains.

Japanese Government Bonds yields hovered at 1.950% as prices came in at 100.412.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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12 May 2006 09:34 GMT