Japan: Nikkei 225 Index

[setravis]

NIKKEI 225 FORGES INVERSE HEAD AND SHOULDERS...

Although a little late to the party, the Nikkei 225 ($NIKK) is showing signs of life with an inverse head and shoulders pattern taking shape. Note that the S&P 500 formed an inverse head and shoulders from mid May to mid September and broke resistance in the second half of September. The Nikkei continued to a new low in late August, but forged a higher low in early November to form the right shoulder. The chart below shows the left shoulder forming in July and the head in late August. With the global rally in stocks, the Nikkei surged to neckline resistance with a strong move the last two days. This reversal pattern would be confirmed with a neckline break, but I am marking a resistance zone around 9750 based on the neckline and October high. A break above the October high would complete the pattern. According to classic technical analysis, the distance from the neckline to the August low (head) is added to the breakout for a target. This targets a move to around 10650.

[setravis]

Japan: Nikkei 225 Index

Japan...
The Nikkei 225 is edging upwards after the breakout above 10200. Twiggs Money Flow (13-week) oscillating around zero, however, indicates hesitancy. Expect further consolidation above the new support level. Reversal below 10200 would warn of another correction.

[setravis]

Japan: Nikkei 225 Index...

The Nikkei 225 respected support at 10200, while Twiggs Money Flow (21-day) recovered above zero. Breakout above 10600 would offer a target of the 2010 high at 11400*.

* Target calculation: 10200 + ( 10200 - 9000 ) = 11400

[setravis]

Japan: Nikkei 225 Index...

The Nikkei 225 is testing resistance at 10600, but Twiggs Money Flow (13-week) remains bearish. Breakout above 10600 would offer a target of the 2010 high at 11400*; reversal below 10200 would re-test primary support at 8800.

* Target calculation: 10200 + ( 10200 - 9000 ) = 11400

[setravis]

Japan: Nikkei 225 Index...

Nikkei hits 9-month high on weaker yen, foreign buying
TOKYO | Tue Feb 15, 2011 9:45pm EST

TOKYO (Reuters) - Japan's Nikkei stock average climbed to a nine-month high above 10,800 on Wednesday helped by a softer yen, with the benchmark's strong run encouraging foreign investors to broaden their buying to financial shares.

It was a third straight day of gains for the Nikkei, which has climbed some 17 percent since November when foreigners began snapping up lagging Tokyo stocks, with recent momentum coming from a big shift in market focus to developed economies from emerging ones.

"It's a weaker yen that's lifting sentiment, but foreign investors are also picking up domestic-demand stocks," said Shinichiro Matsushita, a market analyst at Daiwa Securities adding that banking and insurance stocks were in favor.

The dollar climbed against the yen to its highest in eight weeks on Tuesday, boosted by the recent rise in U.S. Treasury yields, with more gains seen likely if bond markets continue to factor in inflation.

The Topix banking index .IBNKS.T added 1.4 percent, while the index of other financials .IFINS.T, which includes consumer lenders, gained 2.5 percent.

But Matsushita said domestic investors, including retail investors, may be taking profits at the recent highs as they tend to buck the trend and gains may be limited.

At the midday break, the Nikkei average was up 0.4 percent, or 41.46 points at 10,788.13, after hitting an intraday high of 10,802.96, its highest level since May 6, 2010.

Analysts said the Nikkei was likely to move between 10,700-10,850 during Wednesday's trade.

The broader Topix .TOPX rose 0.5 percent to 967.38.

"Recent higher volumes are also helping the mood, so although the Nikkei may move in a narrow range, the market may continue to add gains," said Hiroichi Nishi, general manager at Nikko Cordial Securities.

The Tokyo stock exchange's first section has seen more than 2.0 billion shares change hands for seven consecutive sessions.

Kenichi Hirano, operating officer at Tachibana Securities, said the Nikkei could approach 12,000 over the next few months.

"Despite signs of economic recovery in the U.S., the Federal Reserve is still hamstrung by some market factors in tightening monetary policy, so a very positive situation for stocks with the global economy picking up speed and excess liquidity will probably continue until March or April."

Strong October-December corporate earnings and worries over inflation in emerging markets will continue to support Tokyo stocks, he said.

The dollar climbed to an eight-week high of 83.93 yen on Tuesday and was trading a tad below that on Wednesday.

Exporters rose, with Tokyo Electron (8035.T) rising 1.8 percent to 5,640 yen and Advantest (6857.T) adding 1.7 percent to 1,753 yen.

Daihatsu Motor Co (7262.T), part of the Toyota Motor Corp (7203.T) group, gained 0.9 percent to 1,314 yen after the Nikkei business daily reported the two carmakers would begin manufacturing a low-priced compact car in Indonesia as early as 2013 for sale there and in neighboring countries.

Toyota was 0.5 percent higher at 3,930 yen.

[setravis]

Japan: Nikkei 225 Index...

Nikkei set to inch up, earnings outlooks boost Wall St
Thu Feb 17, 2011 6:32pm EST


TOKYO, Feb 18 (Reuters) - Japan's Nikkei average is likely to
extend its winning streak to a fifth session on Friday after
logging a 9-1/2-month high the day before, as bullish corporate
forecasts helped Wall Street shrug off concerns about tensions in
the Middle East and mixed data. But market players said gains will likely be limited as the
benchmark index has advanced over 2 percent in only four days,
and as caution sets in ahead of a three-day weekend in the United
States. The yen is also slightly stronger against the dollar,
which may hurt exporters. The Nikkei, having added some 6 percent this year, is the
best-performing Asian market so far in 2011, while Asian stocks
outside Japan .MIAPJ0000PUS are down some 2 percent on the year
to date, largely due to inflation worries and anticipated further
interest rate hikes in countries including China. "The pick-up in the U.S. economy, which is the underlying
reason for the rally on Wall Street, is helping Tokyo equities,"
said Hiroichi Nishi, general manager at Nikko Cordial Securities. U.S. companies giving upbeat forecasts included Nvidia Corp
(NVDA.O) and Dr Pepper Snapple Group Inc (DPS.N). "Continued strong demand from foreigners is also helping the
Nikkei, so even though gains may be limited today, there are many
bargain hunters out there who will buy on dips if the market goes
negative even a little bit," said Nishi. He added that market watchers will pay close attention to the
continuing unrest in the Middle East. Bahrain cracked down on protesters and clashes were reported
on the streets of Libya and Yemen, while Iran has angered Israel
by sending two warships to Syria. Nikkei futures traded in Chicago 2NKc1 were at 10,870, up
0.3 percent from the Osaka JNIc1 close of 10,840. Market players added that energy and commodities stocks, such
as Japan's biggest oil and gas developer, Inpex Corp. (1605.T),
are set to outperform again as the Middle East turmoil sent oil
higher along with safe-haven currencies such as the Swiss
Franc. The Nikkei ended Thursday's session up 0.3 percent at
10,836.64, the highest closing price in nine and a half months. It earlier rose as high as 10,891.60, which was the highest
intraday level since an April 30 peak of 11,092.52. Analysts said the Nikkei is likely to move between 10,750-10,950.

----------------------MARKET SNAPSHOT @ 2220 GMT ------------                 INSTRUMENT   LAST       PCT CHG   NET CHG
S&P 500             .SPX       1340.43      0.31%     4.110
USD/JPY             JPY=       83.3         0.01%     0.010
10-YR US TSY YLD    US10YT=RR  3.5763          --    -0.047
SPOT GOLD           XAU=       1383.05     -0.02%    -0.250
US CRUDE            CLc1       86.36        1.61%     1.370
DOW JONES           .DJI       12318.14     0.24%     29.97
-------------------------------------------------------------
> Recent leaders juice up Wall St                           
> Swiss franc up on MidEast tension, US dollar falls     
> Bonds rise as Mideast tensions spur safety bid           
> Gold hits 5-week high on inflation, rising tension     
> 1-U.S. oil rises on Mideast, Africa turmoil               

STOCKS TO WATCH:

Sony Corp
Sony launched a new service called Music Unlimited Powered By
Qriocity in the United States on Thursday, offering 6 million
songs on demand through the cloud-based network that 60 million
Sony PlayStation gamers use to play video games online.

Nissan Motor
Carmakers in Spain said on Thursday they might cut investment
plans vital for job market recovery because of a new law which
saddles them with the costs if salesrooms fail to sell cars. "This new situation obliges us to reconsider some of our already agreed investment plans," said carmakers association
ANFAC, whose members include Ford, Nissan, Peugeot and Volkswagen. 

Mizuho Financial Group
Mizuho is planning to put several tens of millions of dollars
into a fund to invest in companies belonging to India's Tata
Group, a source with knowledge of the deal said.

Idemitsu Kosan Co
Three Japanese firms led by project operator Idemitsu Kosan
said on Thursday they have found oil and gas in an offshore
exploration well in southern Vietnam, as Japan's energy sector
steps up exploration activity in Southeast Asia.

Mitsubishi Estate ; Heiwa Real Estate,
Mitsubishi Estate said on Thursday it would raise its stake
in Heiwa Real Estate to about 10 percent. Heiwa Real
Estate said it plans to raise 13.4 billion yen ($1.61 million)
through a new share issue. That will include a third-party
allocation to Mitsubishi Estate.

[setravis]

Japan: Nikkei 225 Index...
The Nikkei 225 and $JPDOW are advancing towards resistance at their 2010 high. Rising Twiggs Money Flow (13-week) reflects increased buying pressure. Breakout above 66 on the $JPDOW (or 11400 on N225) would signal a primary advance, offering a long-term target of 79* (14000* on the N225).

* Target calculation: 66 + ( 66 - 53 ) = 79; 11400 + ( 11400 - 8800 ) = 14000

[setravis]

Japan: Nikkei 225 Index...
The Nikkei 225 penetrated its rising trendline to warn of slowing momentum. Bearish divergence on Twiggs Money Flow (13-week) indicates selling pressure. Reversal below 10400 would confirm a correction.

* Target calculation: 11400 + ( 11400 - 8800 ) = 14000

[setravis]

Japan: Nikkei 225 Index...
The Nikkei 225 retreated Monday and is headed for another test of support at 10400. Bearish divergence on Twiggs Money Flow (13-week) continues to warn of selling pressure. Failure of support would signal a correction.

* Target calculation: 11400 + ( 11400 - 8800 ) = 14000

[setravis]

Japan feeds more money to banks as stocks slump
TOMOKO A. HOSAKA - AP - 1 hr 3 mins ago

TOKYO (AP) — Japan's central bank pumped billions more into the financial system Tuesday to quell fears that the country's banks could be overwhelmed by the impact of the massive earthquake and tsunami. Stocks slumped as a nuclear crisis escalated.

Two cash injections totaling 8 trillion yen ($98 billion) came a day after the Bank of Japan fed a record 15 trillion yen ($184 billion) into money markets and eased monetary policy to support the economy in the aftermath of Friday's 8.9 magnitude quake that has killed thousands.

The injections have helped stabilize currency markets. But stock markets dived for a second day as investors unloaded assets amid escalating worries of a nuclear crisis.

The benchmark Nikkei 225 stock average slid as much as 14 percent after Prime Minister Naoto Kan warned residents near a damaged nuclear power plant in tsunami-ravaged northeastern Japan to stay inside or risk getting radiation sickness. By mid afternoon, the index was down about 9 percent.

Radiation is leaking from damaged reactors at the crippled plant in a dramatic escalation of the 4-day-old catastrophe. Kan said there is dangers of more leaks and told people living within 19 miles (30 kilometers) of the Fukushima Dai-ichi complex to stay indoors.

The Bank of Japan has moved quickly to try to keep financial markets calm. By flooding the banking system with cash, it hopes banks will continue lending money and meet the likely surge in demand for post-earthquake funds.

Analysts say Japan can tap its vast bond market to help pay for reconstruction in the coastal regions shattered by the tsunami that the quake spawned. But it will add to strains on the national finances. The country is saddled with massive debt that, at 200 percent of gross domestic product, is the biggest among developed nations.

"Japan will be poorer, for this disaster," said Peter Morici, a business professor at the University of Maryland. "Rebuilding will run down Japan's financial wealth."

The central bank's nine-member policy board also voted unanimously Monday to ease monetary policy. It will expand the size of an existing program to buy assets — such as government and corporate bonds — by 5 trillion yen to 40 trillion yen ($486.4 billion). It kept its key interest rate at virtually zero.

Credit Suisse economist Hiromichi Shirakawa and analysts at Barclays Capital estimated the damage at up to 15 trillion yen ($183 billion) — about 3 percent of gross domestic product. Other experts warned the economy will shrink for two straight quarters.

That represents a painful blow for Japan which lost its place as the world's No. 2 economy to China last year. The Japanese economy has been ailing for two decades, barely managing to eke out weak growth between slowdowns. It is saddled with a massive public debt that, at 200 percent of GDP, is the biggest among industrialized nations.

Morici said the nuclear crisis combined with the twin hit from the quake and tsunami could make Japan more vulnerable than it was in the past.

"The double whammy has the potential to keep the Japanese economy shut down longer and globalization offers Japan's export customers alternatives they might not have enjoyed a decade or two ago," he said. "Hyundai and Ford now are good substitutes for Toyota's cars, and even more so, Caterpillar tractors made in China can replace Komatsu's land movers."

The four most severely affected prefectures (states) in the northeast — Iwate, Miyagi, Fukushima and Ibaraki — account for about 6 percent of Japan's economy.

Power supply has failed in the worst affected areas and power rationing may be imposed in other regions. Ports are closed, steel plants have stopped producing, and several major oil refineries have shut down. Getting manufacturing up and working again may be a bigger challenge than in the catastrophic 1995 Kobe earthquake because a larger area is affected.

In the northeastern city of Sendai, the railway station stood deserted. State television footage showed ceilings and walkways collapsed onto the platforms, walls warped and leaning onto the tracks. There was no indication when the station and lines running through could be repaired and operating again.

The northeast is also a major center for car production, with a myriad of parts suppliers and a network of roads and ports for efficient shipments. Toyota Motor Corp said it would suspend manufacturing at its domestic plants through Wednesday — a production loss of 40,000 cars. Other manufacturers including Sony Corp. and Honda Motor Co. were also forced to halt production.

"There is no way to get our products out, even if we make them, with the roads and distribution system damaged," said Honda Motor Co. spokeswoman Natsuno Asanuma.

The aftermath is being felt nationwide.

Four nuclear plants were damaged in the temblors, causing widespread power shortages. Trains in Tokyo, the nation's capital, usually run like clockwork. But are running on a reduced schedule or stopped entirely, preventing millions of commuters from reaching workplaces.

Billions of dollars are expected to be needed to rebuild homes, roads and other infrastructure requiring public spending that will benefit construction companies but add to the national debt.

The economy will eventually get a boost from reconstruction but "this does not mean that Japan is better off," said Julian Jessop, chief international economist at Capital Economics in London. It's a quirk of accounting that destruction of assets is not counted as a reduction in the economy but replacement of those assets boosts economic activity, he said.

Credit Suisse's Shirakawa said in a report the direct economic losses such as property destruction could total 6 trillion yen ($73 billion) to 7 trillion yen. Indirect losses such as lost production will probably be higher.

Other estimates are more pessimistic.

"At the end of the day, this will probably cost a few hundred billion dollars," said Song Seng Wun, economist with CIMB-GK Research in Singapore. "It's going to be a big strain on public finances."

___

Associated Press Writer Alex Kennedy in Singapore and AP Business Writer Yuri Kageyama contributed to this report.

[setravis]

Japan's nuclear reactors under states of emergency
The Associated Press - AP - Mon Mar 14, 7:38PM CDT

Japan is struggling to prevent nuclear catastrophe at its reactors in the days since a massive earthquake and tsunami knocked out power, crippling cooling systems needed to keep nuclear fuel from melting down.

So far, there are nine nuclear reactors at three sites in Japan that are under states of emergency — three at Fukushima Dai-ichi, three at Fukushima Daini and three at Onagawa. All are northeast of Tokyo and all are boiling water reactors.

Here's what is known about each:

— Dai-ichi Unit 1: Some uranium pellets in the fuel core have already melted. Workers trying to prevent total meltdown, released steam in attempt to lower pressure in reactor vessel. Led to hydrogen explosion that blew away much of the containment building. Reactor vessel said to be intact. Regular cooling methods have failed; large amounts of seawater being pumped into reactor vessel to try cooling the severely overheated uranium core. Offsite radiation has been reported.

— Dai-ichi Unit 2: Ability to cool unit has been lost. Officials say fuel rods have been fully exposed, at least twice. An attempt to channel seawater into the reactor failed due to stuck rod, so officials were trying to spray cool water on the top of the reactor vessel. Explosion occurred early Tuesday at this reactor. Partial fuel melt believed to have already occurred.

— Dai-ichi Unit 3: Hydrogen explosion on Monday. Radiation believed released. Officials using seawater to cool the unit. Partial meltdown also has occurred.

— Daini units 1, 2 and 4: Retained offsite power, but operators were experiencing equipment failures and increased pressure inside the containment vessels. There have been problems with residual heat removal systems.

— Onagawa units 1, 2 and 3: Officials have said they'd detected higher-than-permitted radiation levels. When the levels fell, they said the radiation could have been from a release at the Dai-ichi units.

___

SOURCE:

Official government and industry statements in Japan and the International Atomic Energy Agency.

[setravis]

As Japan shutdowns drag on, auto crisis worsens
With shortages looming at car dealerships and factories, the global auto crisis deepens
Sunday March 27, 2011

TOKYO (AP) -- The auto industry disruptions triggered by Japan's earthquake and tsunami are about to get worse.

In the weeks ahead, car buyers will have difficulty finding the model they want in certain colors, thousands of auto plant workers will likely be told to stay home, and companies such as Toyota, Honda and others will lose billions of dollars in revenue. More than two weeks since the natural disaster, inventories of crucial car supplies -- from computer chips to paint pigments -- are dwindling fast as Japanese factories that make them struggle to restart.

Because parts and supplies are shipped by slow-moving boats, the real drop-off has yet to be felt by factories in the U.S., Europe and Asia. That will come by the middle of April.

"This is the biggest impact ever in the history of the automobile industry," says Koji Endo, managing director at Advanced Research Japan in Tokyo.

Much of Japan's auto industry -- the second largest supplier of cars in the world -- remains idle. Few plants were seriously damaged by the quake, but with supplies of water and electricity fleeting, no one can say when factories will crank up. Some auto analysts say it could be as late as this summer.

Hitachi Automotive Systems, which makes parts such as airflow sensors and drive control systems, is waiting for its suppliers to restart while dealing with its own problems. Its plants are without water and gas, and have rolling electricity blackouts. Workers are repairing crumpled ceilings, fallen walls and cleaning up shattered glass. A spokesman says he doesn't know when its plants will reopen.

The uncertainly has suppliers, automakers and dealers scrambling. And it exposes the vulnerability of the world's most complex supply chain, where 3,000 parts go into single car or truck. Each one of those parts is made up of hundreds of other pieces supplied by multiple companies. All it takes is one part to go missing or arrive late, and a vehicle can't be built.

When General Motors briefly shut a pickup plant in Shreveport, La., due to a lack of parts, it caused the partial closing of a New York factory that supplies engines for those trucks. Sweden's Volvo has warned that its production could be disrupted because it is down to a week's worth of some parts.

Car buyers will soon see higher prices and fewer choices. Some car colors will be harder to get because a paint pigment factory in Japan was damaged and shut production. As a result, Ford is telling dealers to stop ordering "tuxedo black" models of its F-150 pickup and Expedition and Navigator SUVs. It's also shifting away from some reds. The moves are precautionary, Ford says. Chrysler told dealers it was temporarily restricting orders of vehicles in 10 colors.

That worries some dealers, especially when popular colors like black could be in short supply

"It's hard enough to sell a $60,000 Navigator in this economy," says Fortunes O'Neal, general manager at Park Cities Ford in Dallas. "We don't want to have to tell customers, `You've got to pick another color.'"

Customers also face rising prices for models like Toyota's Prius, which is made only in Japan. Fears of falling supply have some dealers driving a hard bargain with customers who want the fuel-efficient hybrid as gasoline prices rise. Recent discounts of 5 to 10 percent on that car are disappearing.

Japanese carmakers, who have shut most of their domestic plants, are warning that some of their overseas factories will stop running, too, in an effort to conserve supplies. Toyota and Honda expect shutdowns at North American plants. Honda says production could be interrupted after April 1. Even though most of its parts are sourced in the region, a few critical ones still come from Japan.

Goldman Sachs estimates the shutdowns are costing the Japan automakers $200 million a day, which adds up to $2.8 billion for just the past two weeks. Each week of continued shutdowns costs $1.4 billion. By comparison, Toyota made $2.3 billion in all of 2010, and its sudden acceleration recalls cost $2 billion. The cost of damage from Japan's natural disaster could dwarf that recall, which was considered Toyota's biggest crisis ever.

Much depends on how many spare components automakers have in stock -- which is probably very few. Japan's automakers spearheaded lean manufacturing, under which parts are delivered to plants the same day they are used. Automakers are still receiving parts that were put on ships weeks ago, but those supplies will dwindle.

After the earthquake hit, car companies began the long process of figuring out which parts are in danger of running out. That means figuring out where every piece in every part comes from.

"Everyone is putting on the brakes a little bit and taking a look to see where they are affected," says Paul Newton, an analyst with IHS Automotive.

Companies will shut down plants as soon as some parts start running out, which could start happening in the next four to six weeks, he says. "You will see it happen almost daily."

IHS Automotive predicts that one-third of daily global automotive production will be cut because of supply chain disruptions. That means about 5 million vehicles worldwide won't be built, out of the 72 million vehicles planned for production in 2011.

To get a feel for the supply chain, consider a car radio. It's made up of hundreds of pieces from all over the world. The display may come from a supplier in Japan, while the wiring and circuitry originate in Korea. The plastic knobs could come from a company in China, and the metal structure that holds it all together is shipped from India.

All those parts come together at different times: The wiring and electronic components are installed into the metal frame. Then that piece is shipped to another supplier, who snaps on the plastic face and knobs. The radio could pass through three or four suppliers before being put on a ship, where it will spend weeks at sea heading to its final destination: The assembly plant.

"This isn't just as straightforward as assembling the iPad 2," says Brian Johnson, an autos analyst with Barclays Capital.

An example of Japan's importance in auto parts: its suppliers make many of the electronic components that control music systems and the sensors that monitor fuel levels and airbags.

Although most Japanese auto parts makers are not located in the areas that were inundated by the tsunami, between quake damage, electricity outages and water cutoffs, many factories in the region have remained paralyzed ever since.

Suppliers could be up and running again in April, but it could take until May or June for the entire supply base to be back.

Some car manufacturers, meanwhile, are considering shifting operations to deal with the crisis. Nissan, for example, is thinking of moving some of its engine production to Tennessee from Japan.

But those shifts won't be easy. First, lean inventories make it hard for automakers to suddenly change sources of supply. And plants that build car electronics, for example, have stringent safety requirements and exacting high-tech specifications that limit a company's flexibility, says Christopher Richter, an industry analyst at CLSA Asia Capital Markets. A supplier for the computer chip that triggers an air bag, for example, can't be switched quickly.

But car executives can keep this from becoming a total disaster: They can allocate scarce parts to their more popular or profitable vehicles, keeping those assembly lines running while slowing down the less profitable ones.

That's what many people believe GM did when it decided to close the Shreveport plant, because dealers have ample inventory of both trucks made there, more than two months' worth.

Newton says car companies will do their best to keep producing the cars people want.

"It's quite a lot to prioritize, but they'll do it," he says.

Kurtenbach reported from Tokyo and Carty reported from Detroit. David Koenig in Dallas contributed to this report.

[setravis]

Japan...
The Nikkei 225 displays both bullish and bearish divergences on 13-week Twiggs Money Flow. The prevailing trend is bearish, however, and we should expect another test of support between 8600 and 8800.