Yen Drops Despite Solid Tankan

Japanese stocks rose Monday morning, boosted by positive results from the Bank of Japan Tankan survey of manufacturing sentiment. The Nikkei 225 climbed 0.9 percent to 16,268.90. The broader Topix was up 0.7 percent to 1,622.53. One of the strongest risers was transport equipment. It was boosted by a winning combination of the Tankan, which sent investors racing for blue-chip stocks, and a weakening of the yen, which improved exporters’ competitiveness. The sector rose 1.6 per cent. Honda, Japan’s third biggest carmaker, leapt 2.8 percent to Y4,080. Toyota, its largest, rose 1.1 percent to Y6,490. Real estate stocks continued their climb in the wake of figures in recent months showing that rising in property prices are spreading further across Japan. The sector rose 1.3 per cent. Mitsubishi Estate was up 2.1 percent to Y2,635. Mitsui Fudosan, Japan’s biggest property company, rose 0.9 percent to Y2,710. Among blue-chip exporters in the electrical machinery sector, Matsushita Electric Industrial, which under the Panasonic brand is the world’s biggest consumer electronics maker, was up 0.8 percent at Y2,520. But rival Sony fell 2.1 percent to Y4,680, continuing to suffer from news of potentially dangerous laptop batteries made by the company. KDDI, Japan’s second biggest phone company, rose 1.9 percent to Y750,000 after media reports it would buy Tokyo Electric Power’s fibre optic arm for more than Y100bn, giving it a stronger competitive position in the broadband market. Tepco rose 0.3 percent to Y3,410.  

Japanese Government Bonds fell on the back of strong Tankan numbers as yields rose solidly above the 1.7000 level trading at 1.715% up 6 basis points from Friday.