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Nikkei falls on bond market rout, Konica Minolta jumps
May 14, 2015 / 2:31 AM / 3 years ago

Nikkei falls on bond market rout, Konica Minolta jumps

* Bond yield rise threat to stock valuation
    * Railway companies, real estate firms among underperformers
    * Konica Minolta jumps on higher shareholder returns

    By Hideyuki Sano
    TOKYO, May 14 (Reuters) - Japan's Nikkei share average
dropped on Thursday as another rise in bond yields around the
world kept many investors on edge, but Konica Minolta jumped
after it joined a growing list of companies announcing higher
payouts for shareholders.
    The Nikkei share average dropped 0.7 percent to
19,627.51, snapping four-day winning streak. It was still up 1.3
percent on the week.
    U.S. debt yields rose sharply on Wednesday despite soft U.S.
economic data, worrying investors as higher bond yields tend to
dent the attraction of stock investments relative to bonds. 
    "I think the market is starting to price in an end of
super-easy monetary policy around the world," said Takashi
Hiroki, chief strategist at Monex Securities.
    Rise in bond yields would be among biggest concerns for the
market, Hiroki said, noting that U.S. Federal Reserve Chair
Janet Yellen and billionaire investor Warren Buffett have both
warned that stock valuations would be expensive if interest
rates rise.
    Many investors think the market will be capped as long as
bond yields remain volatile. Japanese bond yields also rose on
Thursday in tandem with those on U.S. and European bonds.
    The 10-year Japanese Government Bond yield rose to 0.470
percent on Thursday, matching two-month high hit
earlier this week.
    Sectors that are deemed vulnerable to higher interest rates
came under pressure the most.
    Railway company shares fell sharply, making the land
transport company sub-index the worst performer among
the Tokyo Stock Exchange's 33 industry subindexes with its fall
of 2.0 percent.
    Central Japan Railway fell 2.6 percent and Odakyu
Electric Railway dropped 3.0 percent.
    Real estate companies were another big drag,
falling 1.3 percent. Mitsubishi Estate fell 1.7
    The broader Topix fell 0.6 percent to 1,594.84 and
the JPX-Nikkei Index 400 dropped 0.6 percent to
    On the other hand, many manufacturers and exporters shares
gained as investors looked to improvements in their earnings.
    Nissan Motor rose 2.1 percent following upbeat
earnings while Hitachi gained 0.8 percent.
    Companies that boosted shareholder returns are being 
followed closely, with Konica Minolta rising 12.8
percent after it announced a share buyback and dividend hike on
top of solid earnings.
    Toshiba shares rose 2.6 percent after the company
said the mark-down in its profits due to accounting
irregularities is estimated at a total of around 50 billion yen
($420 million) over the past three years.
    That announcement soothed fears the investigation could lead
to a major scandal.

 (Editing by Eric Meijer)

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