Ex-Goldman Manager’s Independent Fund Ranked Japan’s Best

Hideto Fujino, a former Goldman Sachs Group Inc. (GS) manager whose independent fund is ranked one of Japan’s best, is beating peers by buying carparks and women’s gyms and shunning companies in the Nikkei 225 Stock Average (NKY), which has lost 80 percent since 1989.

Stocks such as Park24 Co. (4666) and women’s fitness-club operator Koshidaka Holdings Co. have helped Fujino’s 2.3 billion yen ($29.3 million) Hifumi Fund return 31 percent since October 2008, compared with a 23 percent drop on the Nikkei 225 and a 9 percent loss for the Tokyo Stock Exchange’s small shares index. The mutual fund, which includes eight companies from the Nikkei 225 in its 58-stock portfolio, was named Japan’s best this year by Rating & Investment Information Inc., the country’s top rating company.

“Investing in the big Japanese companies is a real gamble because they are so exposed to the volatile global economy, especially recently,” said Fujino, 45, chief investment officer at Rheos Capital Works Inc. in Tokyo. “If you look at small stocks, you can find a lot of companies where decision-making is fast and the focus is on long-term growth.”

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This Week’s Tax Debate in Japan’s Diet Could Move Markets

Japanese stocks have had a good run so far this year.  But whether the good times continue–both for stocks and bonds–depends critically on whether the faction-riven Democratic Party of Japan (DPJ), under the embattled leadership of Prime Minister Noda Yoshihiko, comes up with a credible (and eventually passable) consumption tax increase bill as scheduled this week.

If not, the bearish scenario is that Japan’s bond market will continue heading down, and pull stocks with it.  This scenario has been given a name:  “Ozawa shock.”

Since hitting a low of 8,160 last November 11, the Nikkei 225 Index is up a whopping 23%.  But last Friday’s 10,011 close was off 115 yen (1.14%) from the day before, the second biggest drop of the year.

Read the rest of the story: Whither Japan Stocks and Bonds: This Week’s Tax Debate Could Move Markets.

Does this create American Jobs? The Nikkei to Japan’s Manufacturers: To Survive, Invest Abroad

Does this create American Jobs?

Anyone who knows Japan knows that the Japanese are extremely, often seemingly irrationally, cautious and risk averse.

Any number of social and economic phenomena can be pointed to as evidence of this fact.  World leading rates of buying and holding all manner of personal insurance policies would be just one example.  For corporations, exceptionally—and, for sellers, unnervingly and expensively—long and pain-staking procurement or new project due diligence procedures, resulting, as often as not, in no decision, other than to require further study, would be another.

The Japanese’ risk-aversion is part and parcel with the equally rare and entirely admirable  personal and professional responsibility to try to avoid mistakes that might cause loss or inconvenience to others—and particularly the companies and institutions that employ them–felt by almost everyone in Japanese society.

Read the rest of the story: The Nikkei to Japan’s Manufacturers: To Survive, Invest Abroad.

Japanese Stocks Fall on Italy Bond Yields, Daiwa Rating Cut

Japan’s Topix index headed toward its steepest drop in three months after surging Italian bond yields stoked concern that Europe’s debt crisis is spreading and Daiwa Securities Group Inc. had its credit rating cut.

Sumitomo Mitsui Financial Group Inc., Japan’s second- biggest lender, fell 5.4 percent. Brokerages declined after Moody’s Investors Service downgraded Daiwa’s credit rating and said it may cut Nomura Holdings Inc.’s as global expansions by Japan’s two biggest securities firms unravel. Hitachi Construction Machinery Co. led machinery firms lower after orders declined more than forecast.

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Stocks in Japan Open Lower

Stocks in Japan traded lower Thursday on the heels of a wild day of U.S. trading that ended in a 4%-plus drop for U.S. markets.

The Nikkei (N225) was down 1.3% at the end of its morning trading session, rebounding a bit after opening with a loss of nearly 2%. Stocks in Hong Kong also opened lower, with the Hang Seng (HSI) index dropping 1.2% in early trading.

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Stocks dip after another earthquake hits Japan

Stocks are ending the day with small losses after a 7.4-magnitude earthquake struck Japan.

The Dow Jones industrial average fell as many as 96 points in morning trading, but recovered most of its losses after a tsunami warning was lifted.

The Dow fell 17.26 points, or 0.1 percent, to 12,409.49 The Standard & Poor’s 500 fell 2.03, or 0.2 percent, to 1,333.51. The Nasdaq composite fell 3.68, or 0.1 percent, to 2,796.14.

The quake rattled investors, partly since it struck near the same area as the massive earthquake that triggered devastating tsunami on March 11. Stock indexes pared their losses after the impact of the latest quake appeared to be less than initially feared.

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Japan’s Nikkei higher on G7 currency pledge

Japan’s stocks posted solid morning gains Friday after the Group of Seven major industrial nations agreed to intervene in currency markets to help the earthquake-stricken nation.

The benchmark Nikkei 225 rose 1.8 percent, or 158.26 points, to 9,120.93. While the G-7 did not say what it would do, the implication is that actions were under way to ensure the yen does not spiral upward.

The Kyodo News agency said Japan’s government intervened in currency markets after the G7 statement but there was no immediate official confirmation of that.

A stronger yen hurts Japan’s powerhouse export sector — potentially dealing another problem to an economy already wracked by an earthquake, tsunami and evolving nuclear crisis.

The G-7 pledge adds to a flurry of moves by Japan to calm roiled financial markets following the 9.0-magnitude quake and tsunami on March 11. The Bank of Japan injected an additional 6 trillion yen ($76.7 billion) in same-day funds Thursday that banks can access immediately. From Monday to Wednesday, the central bank’s emergency funding totaled 55.6 trillion yen ($688.3 billion).

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Japan central bank injects $184B as stocks dive

Japan’s central bank is injecting a record 15 trillion yen ($183.8 billion) into money markets, while the Tokyo stock market nosedived Monday on the first business day since an earthquake and tsunami devastated the country’s northeast and raised dire worries about the economy.

The benchmark Nikkei 225 stock average plunged about 641 points, or 6.3 percent, to 9,612.88, extending losses from Friday. The earthquake hit shortly before markets closed for the weekend.

Worries about the economic impact of the disaster triggered a plunge that hit all sectors. The broader Topix index was down more than percent. Shares of several major companies were overwhelmed with sell orders and had yet to trade.

Among those, the Tokyo Electric Power Co. was set to fall by double digits as it faced power shortages and second hydrogen explosion at a nuclear reactor Monday, sending a massive column of smoke into the air and wounding six workers. Toyota Motor Corp., the world’s biggest automaker, tumbled 7.4 percent.

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Japan quake to keep stock investors wary

The growing devastation in Japan may accelerate the short-term negative sentiment in a U.S. equity market already seen as vulnerable, but ongoing weakness is likely to be confined to specific sectors.

The massive earthquake and tsunami in Japan are estimated to have killed 10,000 people and left officials scrambling to avoid meltdowns at three nuclear reactors.

The disaster hit commodities markets hard on Friday, and brought on a flurry of short bets against Japanese stocks.

The effects on the U.S. market are harder to determine. The S&P 500 fell below its 50-day moving average last week and support appears to be waning, despite a rally on Friday.

In the short term, investors are likely to focus on the ramifications for energy companies, particularly nuclear power. Japanese officials said there may have been a partial meltdown at the No. 1 reactor of a nuclear plant in Fukushima.

"The disaster could prove to be a setback for nuclear power as an alternative energy source," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "Whether or not we see a reaction in utilities and engineering and construction companies remains to be seen."

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Nikkei hits 7-month high

Japan’s Nikkei average rose to a fresh seven-month high on Wednesday, reflecting general bullishness in global equities markets, but the market lacked energy to extend gains ahead of holidays.

Strength in resource-related stocks in the wake of a rally in commodity prices and inflows into domestic demand-led shares, such as banks and real estate, bolstered overall sentiment to
draw steady bargain-hunting, traders said.

But investors turned reluctant to chase Tokyo shares too strongly or to hold on to large buy positions ahead of a public holiday in Japan on Thursday and holidays in overseas markets this week and next.

“Sentiment is being lifted by rises in domestic demand-led stocks like banks, along with gains in resource-related shares, but the market turned somewhat cautious as the Nikkei approached
10,420.74,” said Takashi Ohba, a senior strategist at Okasan Securities.

That is where futures and options contracts expiring in December settled earlier this month. It is being closely watched by market participants as an important technical point.

The benchmark Nikkei .N225 ended the morning session up 0.1 percent or 5.95 points at 10,376.48, after touching a fresh seven-month high of 10,394.22.

Read the rest of the story: Nikkei hits 7-month high but gains slow | Reuters.