Tag Archives: Nomura Holdings

Business, Finance, Occupation & Industry

Japan's Stimulus Opens the Yen Floodgates

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By Dan Carroll, The Motley Fool

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It’s been an exciting week across the Pacific, to say the least. Japan shocked the world with its massive stimulus program announced recently, and the Nikkei responded positively by soaring to gains of more than 3.6% over the past five days. Will stimulus be enough to end Japan‘s deflationary stagnation that has stuck about for the past two decades? Only time will tell, but for now, investors and financial firms are brimming with optimism.

Firing a stimulus broadside
New Bank of Japan Governor Haruhiko Kuroda announced earlier in the week that the country’s central bank would begin buying government bonds to the tune of 50 trillion yen — or $520 billion — per year. The BoJ is poised to double the country’s money supply by the end of next year, as Japan unleashes its biggest salvo yet in the war against deflation and economic stagnation. Considering that inflation since prime minister Shinzo Abe entered office has sent the Nikkei roaring to multi-year highs, Japanese stocks are poised to soar even higher on this far more aggressive move. The iShares MSCI Japan Index ETF has capitalized on the weakening yen by pulling in more than 10.5% in the past three months, racing higher on the back of a trend that Abe isn’t looking to slow down any time soon.

Not everyone’s happy, however. Some Chinese economists have speculated that Japan‘s monetary easing will spark a new currency war with other leading economists, such as the U.S., also running stimulus programs. Although the easing could hurt China‘s exports into the nation, other observers have praised the move. Billionaire George Soros told CNBC that Japan‘s new easing policy provides a way for the third-leading economy to “escape after 25 years of slow death,” although Soros also pointed out the dangers possible with such a drastic plan.

Nonetheless, financial firms in Japan are applauding the move. Shares of Mizuho Financial Group and Nomura Holdings took off over the past five days, with each stock gaining more than 9%. Shareholders of Mitsubishi UFJ Financial Group did even better, however: The stock exploded for an astronomical 15% gain over the last five days alone, wiping out what had been a year-to-date loss in just one week.

Other signs from these financial giants point to Japan‘s economic growth. Nomura recently hired the most new college graduates in four years, as it looks to boost its domestic retail operations. Mitsubishi and Mizuho also plan to raise their hiring numbers in 2014. The companies’ moves are part of a wave of confidence in Japan‘s financial industry, as business optimism returns to the country, and investors look to take part in the Nikkei’s unmatched rise. The new stimulus measure should only keep these companies moving forward at a torrid pace as the weak yen fuels Japanese businesses’ success.

In short, it’s a good time to be a Japanese investor.

How can you make money abroad?

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Shinzo Abe's Central Bank Coup Fuels the Nikkei's Rise

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By Dan Carroll, The Motley Fool

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Japanese stocks have been on a roll, and the Nikkei hasn’t let up its rise this week. The index rolled to gains of 1.3% over the past five days, fueled by Friday’s surge of more than 1.4% after the confirmation of new leadership at Japan‘s central bank that will only provide more ammunition to Prime Minister Shinzo Abe‘s inflationary goals. The Nikkei’s up more than 15.8% for the year and investors are happy, but will the good times roll on? Let’s get caught up on what you need to know.

Abe takes the BoJ
The Nikkei got its first bounce when Japan‘s Parliament confirmed the Bank of Japan‘s new governor, Haruhiko Kuroda. Observers expect Kuroda to go along with Shinzo Abe‘s dovish monetary plans that have so far sent the yen into a nosedive against the dollar this year. Kuroda and his new team will have their first policy meeting at Japan‘s central bank next month, and all eyes will be watching to see if any further easing comes as a result.

Eisuke Sakakibara, the former Japanese vice financial minister of international affairs in the late 1990s, said earlier this week that it would be “unlikely” that the yen-to-dollar exchange rate would soar past 100, but little has slowed down Abe’s currency devaluation so far in 2013.

Other nations haven’t been as happy about Japan‘s aggressive moves, however. A group of U.S. lawmakers spoke out against Japan‘s joining of free trade talks in the U.S. — proposed Trans Pacific Partnership (TPP). The TPP originally revolved around America and 10 other Pacific nations establishing a free trade deal, but Japan‘s willingness to join the discussion raised eyebrows over the country’s regulatory barriers that have in the past restricted American autos from the Japanese market.

Still, the talks haven’t hurt Japan‘s leading automaker, Toyota . The auto stock was named individual Japanese investors’ most popular stock in a survey by Nomura Holdings . Toyota’s shares have risen more than 7.8% on the NYSE, but the company’s Nikkei listing has shot up by a whopping 25% to outperform the index. Toyota already retook the global industry lead from rival GM in January, and while GM‘s surging ahead of Toyota in China with the ongoing Chinese-Japanese territorial dispute, the U.S.’s top car company faces plenty of challenges of its own. Further weakening of the yen will only help Toyota expand its worldwide lead as it advances internationally.

The falling yen will likely help out the financial sector as well, and Nomura’s been feeling the love recently. Japan‘s leading financial institution’s shares jumped almost 42% over the past three months, although it did take a blow earlier this week when Bank of America poached its Australian head of mergers and acquisitions. Mizuho Financial Group has also been having a great time recently, with shares up more than 39% over the past three months. The financial stock ranked as Japanese investors’ second most popular stock after Toyota in Nomura’s study, …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Check Out This Inexpensive Basket of Japanese Growers

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By Selena Maranjian, The Motley Fool

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Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some Japanese stocks to your portfolio, the iShares MSCI Japan Index ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF‘s expense ratio — its annual fee — is a relatively low 0.53 %, and it yields nearly 2%.

This ETF has not performed well, as Japan‘s economy has long been struggling. It didn’t beat the MSCI EAFE index over the past three, five, and 10 years. Still, it’s the future that matters more than the past, and investors with conviction need to wait for their holdings to deliver.

With a low turnover rate of 3%, this fund isn’t frantically and frequently rejiggering its holdings, as many funds do.

Why Japan?
It’s good to diversify your portfolio geographically, and Japan‘s fortunes may be turning around, in part due to its new, aggressive prime minister. The Nikkei has been rising, and the yen has dropped recently.

More than a handful of Japan-based companies had strong performances over the past year. Mizuho Financial Group , for example, surged 31%, and recently yielded a solid 3.2%. Japan‘s second-largest lender’s latest earnings report featured earnings up more than tenfold, due to a surging stock market boosting the value of its equity holdings. Lending profits were up 6% over year-earlier levels.

Nomura Holdings , one of the largest banks in the world, gained 25%, despite losing its CEO and COO last year due to an insider-trading scandal. The company recently posted earnings that were a bit disappointing but still up 13%, and it has high expectations for its investment-banking business in 2013.

Other companies didn’t do as well last year, but could see their fortunes change in the coming years. Nippon Telegraph and Telephone gained just 1%, but it’s looking attractive to some, with a recent 4.3% dividend yield and its subsidiary NTT Docomo reducing its debt. But it faces strong competition, such as from Softbank, which recently invested in Sprint Nextel.

Canon , meanwhile, sank 21%, but offers a hefty dividend of 4.2%. The company has posted some disappointing numbers in recent quarters, but it compares favorably on a number of measures with many competitors. Boding well, though, is its patent strength. Canon has been one of America’s top five patent holders for 27 consecutive years. It recently released a new Mixed Reality 3-D headset, and has been taking market share from printer rivals such as Lexmark.

The big picture
A well-chosen ETFcan grant you instant diversification across any industry or group of companies — and make investing in and …read more
Source: FULL ARTICLE at DailyFinance