Tokyo weaker, out of step with Asia


Tokyo's market is lower Thursday, but the rest of Asia is doing better

TOKYO, Japan (CNN) -- Tokyo stocks are weaker heading into Thursday afternoon, but most of Asia is continuing to build on gains from a day earlier.

In Japan, the Nikkei 225 average is down 1.23 percent or 133.13 points to 10,679.17 by midday, while the broader, capital-weighted Topix is off 0.57 percent or 5.99 points to 1038.22.

Markets in South Korea, Hong Kong are Taiwan are all up more than 1 percent, while Singapore is flat heading towards the end of its morning session.

In Seoul, the Kospi is getting a boost from the Bank of Korea's decision to leave interest rates on hold. The central bank has also upgraded its outlook for the Korean economy to 6 percent growth for 2002.

Australia's S&P/ASX200 is up 5.4 points or 0.17 percent to 3191.3 in early afternoon trade, but across the Tasman Sea in New Zealand the Top 40 is off about a third of a percent.

New Zealand lifted rates by a quarter of a percentage point Wednesday to 5.75 percent, while Australia left its cash rate unchanged at 4.75 percent (Full Story).

The strong performance in most of Asia comes after Wall Street finished higher Wednesday, ahead of the July 4 Independence Day holiday in the United States.

The Dow Jones industrial average put on half a percent to 9054.97 and the Nasdaq composite added 1.65 percent to 1380.17.

Worries over strong yen


The stronger yen may weigh on Sony's overseas earnings

In Japan, worries over the yen's strength against the dollar is cutting into big exporters such as automaker Toyota, consumer electronics leader Sony and electrical components maker Kyocera.

The yen has appreciated 11 percent against the dollar since April 1 and is trading in Asia Thursday at 120.2.

Toyota is down 1.9 percent to 3110 yen, rival Nissan is off 0.24 percent to 838 yen and Honda is steady at 5040 yen.

Kyocera, which makes cellphones and electrical components, is 3.48 percent easier to 8590 yen after gaining 2 percent in the previous session.

"The strong yen is still weighing on sentiment and investors think now is a good time to take profits, with the Nikkei seen struggling to reach 11,000," Masatoshi Sato, manager at Mizuho Investor Securities' equity division, told Reuters news agency.

Sony revises outlook

Sony, which gets a large part of its sales overseas, is down 2.24 percent to 6100 yen. On Monday it revised its outlook to say it expects a group operating profit in the three months to June 30.

Sony is assuming an average dollar rate of 130 yen for this business year.

But while techs and exporters are weaker, big bank stocks are higher.

Mitsubishi Tokyo Financial Group is up 1.85 percent to 879,000 yen, after reports that its unit Bank of Tokyo-Mitsubishi plans to make new loans of one trillion yen over the next three years, traders said.

Japan's No. 2 trading house Mitsui & Co has fallen 2.91 percent to 801 yen after Japanese prosecutors arrested three employees on suspicion they were involved in rigging bids for the construction of a power plant two years ago.

Samsung, Posco higher

In Seoul, market heavyweight Samsung Electronics is up 2 percent to 345,000 won and steelmaker Posco is 2.3 percent higher to 133,000 won.

Embattled chipmaker Hynix Semiconductor is again up by its maximum daily limit, putting on 50 won to 385 won.

In Hong Kong, the market is broadly higher. Banking leader HSBC is up 0.28 percent to HK$89.50 and China Mobile has put on 2.4 percent to HK$23.40.

Hutchison Whampoa, which announced Wednesday its global 3G mobile phone networks would carry the brand name '3', is more than 3 percent higher at HK$59.75.

In Taiwan, tech-related stocks are higher, led by chip foundries TSMC and UMC. Industrials are also up, with Taiwan Cement one of the biggest movers, putting on more than 6 percent to T$12.70.

Australia's biggest stock, News Corp, has reversed a string of downturns to put on 37 cents or 3.85 percent to A$9.97.

Telstra is also higher, but resources leaders BHP Billiton and Rio Tinto are both slightly lower. AMP hit a record low of A$15.30 in morning trade, on doubts over its investment earnings. But it recoveredto be 2 percent higher at A$15.77.