Yen Strengthens To Low 116, Nikkei Stock Average Falls Again, Exporters and Autos Sold (HMC, TM, NSANY)

by: Steven Towns

The yen continued its reversal, further strengthening against the dollar to the low 116 level. This is a double-edged sword for American investors because the stronger yen increases the value of Japan investments, (especially after the surprising strength of the dollar rising to 2-year plus highs up until yesterday) but it hurts the earnings of Japan's major exporters, such as autos because they have to convert their profits back to yen. Both the Nikkei 225 Stock Average and TOPIX Index were down, 1.36% and 1.16% respectively. The JASDAQ however, has been unstoppable as it continues to climb, now approaching 118.

We are now in the middle of a timely correction brought on by the Fed rate increase and signal that we are nearing the end of increases, resulting in a sudden strengthening of the yen, and by profit-takers. This seems like an excellent time to take some profits but I would also be looking to pick up some shares after any over reaction-type big sell-offs. It might be harder to find bargains for U.S. investors despite the falling share prices in Japan because of the stronger yen. Nonetheless, I will continue following the biggest advancing and declining shares of those stocks with ADRs (see below) and we also have weekly ADR performance updates.

Nikkei 225: -210.14 (-1.36%) closed at 15,254.44, opened 110+ points lower than prior close of 15,464.58, traded as high as 15,469.35, low was at closing

TOPIX: -18.55 (-1.16%) closed at 1,583.66, opened 8 points lower than prior close of 1,602.21, traded as high as 1,604.70 and as low as 1,581.93

JASDAQ: +0.17 (+0.14%) closed at 117.67, traded between 117.08 and 117.79

Today’s ADRs to watch based on earlier trading of underlying shares in Tokyo:

* Advancers: there were no advancers today and NTT DoCoMo (DCM) was the only stock not to lose as it was unchanged

* Decliners: Kubota (KUB) -3.88%, Nomura Holdings (NMR) -3.45%, Advantest (ATE) -2.93%, Kyocera (KYO) -2.76%, Honda Motor (HMC) -2.51%, Fuji Photo Film (FUJIY) -2.32%, Trend Micro (TMIC) -2.28%, Toyota Motor ( TM) -2.28%, Nissan Motor (NSANY) -1.98%, Matsushita Electric Industrial (MC) -1.96%, Canon (CAJ) -1.86%

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