(Bloomberg) -- Confidence among Japan's largest manufacturers probably improved for a fourth quarter, the first survey by the Bank of Japan since it ended its five-year deflation fighting policy, according to a Bloomberg survey of consensus estimates.
The Bank of Japan's quarterly Tankan survey increased to 23 points in March from 21 in December, the highest since September 2004, according to the median forecast of 22 economists in a Bloomberg News survey. The report is due on April 3 at 8:50 a.m. in Tokyo.
Bloomberg
Tokyo Takes provides updates on market moving news from a Japan perspective.
Monday, March 27, 2006
Tankan Expected to Show Improved Corporate Confidence
Nomura's Earnings Highest in 81 Years
Nomura Holdings Inc. is poised to report the best profit in its 81-year history on record trading in a resurgent home market, but continues to struggle as a global also-ran.
Bloomberg
Bloomberg
Titanium Prices Look to Rise 20%
Supply-Demand Remains Tight
Prices to large lot users in 2006 in current negotiations are likely to be 20% higher (including exports) than 2005 levels. This is the second consecutive year of price hikes, for a cumulative rise of 50%. Domestic demand is strong, while exports are also growing. Titanium use is on the rise for chemical plant ducts and heat exchangers as well as construction materials. Toho Titanium says that plants are operating at full capacity. Titanium sponge shipments in Japan in 2005 rose 18.5% to 23,146 tons, and 12.4% is expected in 2006. Exports of titanium sponge from Japan in 2006 are expected to grow over 30% on historically high levels of orders for Boeing and Airbus for airplanes. While titanium producers are increasing capacity, they are unable to keep up with demand.
This is good news for both Sumitomo Titanium (5726)and Toho Titanium (5727), as Japan is among the few global producers of titanium.
Prices to large lot users in 2006 in current negotiations are likely to be 20% higher (including exports) than 2005 levels. This is the second consecutive year of price hikes, for a cumulative rise of 50%. Domestic demand is strong, while exports are also growing. Titanium use is on the rise for chemical plant ducts and heat exchangers as well as construction materials. Toho Titanium says that plants are operating at full capacity. Titanium sponge shipments in Japan in 2005 rose 18.5% to 23,146 tons, and 12.4% is expected in 2006. Exports of titanium sponge from Japan in 2006 are expected to grow over 30% on historically high levels of orders for Boeing and Airbus for airplanes. While titanium producers are increasing capacity, they are unable to keep up with demand.
This is good news for both Sumitomo Titanium (5726)and Toho Titanium (5727), as Japan is among the few global producers of titanium.
Japan's Personal Financial Assets Top JPY1,500 Trillion
Beginnings of a Wealth Effect
As of the end of December 2005, the balance of stocks held in individual savers' portfolios reached JPY118 trillion and was above JPY100 trillion for the first time in 16 years. Both the balance of stocks and investment trusts have exceeded 1989 peaks. Total personal financial assets at the end of December 2005 were JPY1,585.76 and up 5.3% YoY. However, cash and bank deposits were JPY783 trillion and down 0.6% YoY. Stock balances were up 48% during the year on a 40% increase in the Nikkei 225. Investment trust balances also increased 40% YoY to JPY51 trillion, a new historical high. Total stock, investment trust, foreign currency deposits and investment in overseas marketable securities was JPY180 trillion, meaning that “risk assets” to total financial assets rose to 12%.
TJI's take is that the rise in personal financial assets will only foster a greater willingness to take risk, and that rising personal financial assets particularly stock assets is beginning to support domestic consumption through the wealth effect.
As of the end of December 2005, the balance of stocks held in individual savers' portfolios reached JPY118 trillion and was above JPY100 trillion for the first time in 16 years. Both the balance of stocks and investment trusts have exceeded 1989 peaks. Total personal financial assets at the end of December 2005 were JPY1,585.76 and up 5.3% YoY. However, cash and bank deposits were JPY783 trillion and down 0.6% YoY. Stock balances were up 48% during the year on a 40% increase in the Nikkei 225. Investment trust balances also increased 40% YoY to JPY51 trillion, a new historical high. Total stock, investment trust, foreign currency deposits and investment in overseas marketable securities was JPY180 trillion, meaning that “risk assets” to total financial assets rose to 12%.
TJI's take is that the rise in personal financial assets will only foster a greater willingness to take risk, and that rising personal financial assets particularly stock assets is beginning to support domestic consumption through the wealth effect.
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