5:00 AM New York, 7:00PM Tokyo – The BOJ left key rate at 0.5%, Toshiro Muto proposed as BOJ successor. Japan’s foreign reserve assets reached $1 trillion.
Stocks in Japan fell the most in six weeks on record rises of foreclosures in the U.S. and plummeting commodity prices that helped to dampen market sentiment. Market watchers believe worsening U.S. outlook will tighten credit markets and adversely impact on financial and realty stocks.
Market Sentiment
In Tokyo trading Nikkei 225 fell 3.27% or 432.62 to 12,782.80 down 6% for the week, and the broader Topix Index tumbled 3.1% or 39.78 to 1,247.77.
In the first section of the Tokyo Stock Exchange 9 billion shares worth 1 trillion yen were traded and in the second section 271 million shares valued at 4.5 billion yen changed hands.
Of the Nikkei 225 stocks 16 gained, 102 declined, and 3 were unchanged. Kyowa Hakko Kog led advancers in the Nikkei 225 index shares with a rise of 9.71% followed by Shiseido Co Ltd. increasing 2.71%.
U.S. foreclosures rise to 0.83% in Fourth Quarter
Mortgage Bankers Association said that the rate of loans entering the foreclosure process was 0.83% of all mortgage loans across the United States are in foreclosure in the fourth quarter of 2007, up from the previous high of 0.78% in the July-September quarter and 0.54% from a year ago.
The association said 5.82% of all mortgages were in delinquency in the fourth quarter, the highest since 1985. The total delinquency rate is the highest in the MBA survey since 1985. The rate of foreclosure starts and the percent of loans in the process of foreclosure are at the highest levels ever. The delinquency rate does not include loans in the process of foreclosure.
While subprime ARMs represent 7 percent of the loans outstanding, they represent 42 percent of the foreclosures started during the fourth quarter. Prime ARMs represent 15 percent of the loans outstanding, but 20 percent of the foreclosures started.
California and Florida continue to represent a disproportionate share of the foreclosure starts in the country. Those two states represent 21% of all loans outstanding, but accounted for 30% of foreclosure starts in the US. These states accounted for 39% of all prime ARMs outstanding, but 47% of prime ARM foreclosure starts.
Late payments in the subprime sector rose 20.02% in the October-December period, from 18.81% in the third quarter. Also the fourth quarter foreclosure rate in the subprime sector rose to 5.29% from 4.72% in the previous quarter.
Bank of Japan keeps key rate at 0.5%
The Bank of Japan reported on its web site today that it had unanimously kept its key rate at 0.5%, marking Toshihiko Fukui’s last policy decision as his term expires on March 19.
Japan proposes Muto for BOJ post
The Nikkei news reported that Government today forwarded the name of Toshiro Muto to the Diet as its nomination to replace Toshihiko Fukui as the Bank of Japan Governor and urged the opposition Democratic Party of Japan to co-operate in his nomination.
The opposition is opposed to Muto’s nomination as they believe his previous stint with the Ministry of Finance will threaten the central bank’s autonomy.
Diet will hold hearings on the candidates on March 11.
Separately, Bloomberg news also reported that technocrats Takatoshi Ito and Masaaki Shirakawa were also proposed as the two deputy governors.
Japan foreign reserves top $1 trillion |
