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Japanese Stocks Drop to Close Fiscal Year - 2002-03-29


Japanese stocks fell on the last day of the country's fiscal year and the yen rose slightly on speculation that export firms are repatriating foreign earnings.

Japan's Nikkei Average fell 2.7 percent Friday to 11,024. The index has shed more than eight percent in the past three weeks on worries that the government will try to keep debt-ridden banks from cutting-off bankrupt borrowers. Tokyo fears that increasing corporate bankruptcies would lead to huge job losses and deepen the recession, now in its 17th month.

The government said Friday that the jobless rate for February stabilized at 5.3 percent, but still close to an all-time high. It also released a report saying that factory production rose less than expected.

Garry Evans, chief Japan strategist for banking group HSBC, says that structural problems remain unresolved and that this is continuing to deter foreign investors from buying Japanese equities.

Japan's currency traded at 132.45 against the dollar Friday. It rose slightly on indications that export companies such as Sony and Toyota were bringing their overseas earnings back to Japan. The yen has fallen one percent over the past three months and has lost 10 percent since November. Market watchers are predicting Japan's currency could decline further in the next two months.

In South Korea, the Kospi rose a third of 1 percent to 895. Export firms gained ground as a better-than-forecast U.S. growth report increased hopes that demand from the world's largest economy will rise. Samsung Electronics, the world's top manufacturer of computer memory chips, advanced almost three percent. Hyundai Motor, the nation's biggest automaker, gained more than 2 percent.

Korea Electric Power, the nation's electricity monopoly, shed four percent on fears that rising oil prices will increase the company's fuel costs. The company is also locked in a struggle with more than 3,000 striking state workers who are protesting the government's privatization plans. They have been on strike for five weeks, and the government will elaborate next week on plans to fire them.

In Taiwan, the TWSE Index dropped seven-tenths of one percent to 6,167. Trading was slow, with investors cautiously waiting for first quarter earnings reports. Formosa Plastics Group lost ground after China said it will start investigating plastics makers in Taiwan and other foreign markets for selling their goods below cost on the Chinese mainland.

Markets in Australia, New Zealand, Hong Kong, Singapore, the Philippines, Indonesia and India are closed for a public holiday.

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