Spread on Japan Bonds May Indicate Stocks Will Drop Further, JPMorgan Says

(Bloomberg) -- A widening spread between the interest
Japanese corporate and government bonds pay may indicate that the
stock market may have more room to fall, according to JPMorgan
Chase & Co.

Corporate borrowing costs are measured against the so-called
risk-free yields of government debt. The larger the difference is
between yields, or spread, the higher the perceived risk is of
the borrower defaulting.


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PRESS DIGEST-Financial Times, Wall St Journal Asia editions

(Reuters) - --World markets face a nervous start to the week following
the plunge in stocks in the United States on Friday as concerns
mounted about fallout from the US mortgage market turmoil. The
late sell-off in New York followed comments by the chief
financial officer of Bear Stearns , who said credit
markets were as bad as he had seen in 22 years.




--Japan's Prime Minister, Shinzo Abe,is expected to
reshuffle his cabinet and convene an extraordinary session of
parliament at the end of the month to try to keep his job after
his party's trouncing in upper house elections.


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Toyota profit jumps on sales rise

(Reuters) - Toyota, the world's biggest and most profitable automaker, left its cautious annual forecasts unchanged, as expected.




The Japanese firm, valued at $215 billion -- more than 10 times the market capitalization of U.S. rival General Motors Corp. -- is on its way to a seventh straight year of record earnings, powered by a rapid expansion into developing markets such as China and Russia.


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Japan Stocks Decline on U.S. Concerns, Strong Yen; Sony and Mizuho Drop

(Bloomberg) -- Japanese stocks fell after American
Home Mortgage Investment Corp. said it lacks cash to fund new
loans, sending U.S. shares lower and reigniting concerns subprime
problems will curb growth in the world's largest economy.

Exporters including Sony Corp. declined after the yen
strengthened, cutting the value of their overseas sales in the
local currency. The U.S. Standard & Poor's 500 Index posted its
biggest monthly drop in three years.


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Japan's Government Bonds May Gain as Losses at Hedge Funds Spur Purchases

(Bloomberg) -- Japanese bonds may gain for a second
day as reports of more losses at hedge funds globally spur
demand for the relative safety of government debt.

Emerging-market and corporate debt fell yesterday on
concern investors are selling riskier assets as the credit
quality of U.S. mortgages to people with poor credit
deteriorates. Treasuries rose in New York, pushing yields on 10-
year notes to the lowest close since May 16.


Read more at Bloomberg Bonds News

New Zealand Dollar Declines as Housing Woes Spur Reduction in Risky Bets

(Bloomberg) -- The New Zealand dollar dropped on
renewed concern that losses from U.S. subprime mortgages will
prompt investors to reduce holdings of riskier investments.

The currency, known as the kiwi, is a favorite for the so-
called carry trade, where investors borrow cheaply in yen to
invest in countries that offer higher yields. New Zealand's
record 8.25 percent benchmark rate is 7.75 percentage points
higher than Japan's and 3 points more than the Federal Reserve's
target, luring investors to the local currency. U.S. stocks slid
on concern more companies will be affected by defaults related
to subprime mortgages.


Read more at Bloomberg Currencies News

Most Japanese Stocks Climb; Olympus Leads Gains on Earnings, Kyocera Falls

(Bloomberg) -- Most Japanese stocks advanced after
companies including Olympus Corp. and Mitsubishi Corp. reported
first-quarter profit that attracted buyers.

Gains were limited after earnings at companies including
Kyocera Corp. lagged behind investor expectations.


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UPDATE 1-Takeda profit rises 5.1 percent, outlook unchanged

(Reuters) - Actos, the main earnings engine for Japan's largest drug
maker, has seen its fortunes rise after sales of
GlaxoSmithKline's Avandia slumped following a critical
study by top cardiologist Steven Nissen published on May 21.




Takeda said April-June first-quarter net profit climbed to
131 billion yen on a 9.6 percent rise in revenue from a year
earlier to 366 billion yen.


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Two-Year Note Auction in Japan to Draw Lowest Price of 99.97, Survey Shows

(Bloomberg) -- Japan's sale of 1.7 trillion yen
($14.3 billion) of two-year notes today may have a lowest-
accepted price of 99.97, according to the median forecast of 13
traders surveyed by Bloomberg News.

Estimates for the lowest-accepted price ranged from 99.97
to 99.975. The price is the minimum at which the government
sells the securities.


Read more at Bloomberg Bonds News

Canadian Dollar Falls for 4th Day on Subprime Debt, Commodities Concerns

(Bloomberg) -- The Canadian dollar fell for a
fourth day as investors sold commodity-linked currencies on
speculation U.S. subprime mortgage losses will slow the world's
largest economy.

The Canadian currency was the second-worst performer among
the 16 most actively traded currencies, trailing only Japan's
yen, while falling 0.3 percent to 93.70 U.S. cents. One U.S.
dollar buys C$1.0662.


Read more at Bloomberg Currencies News

Yen May Extend Decline Against Euro, Dollar as Stock Rally Encourages Risk

(Bloomberg) -- The yen may extend its decline
against the euro and dollar as a rebound in U.S. stocks might
restore investors' confidence to buy higher-yielding assets
funded by loans in Japan.

The Japanese currency dropped yesterday as rising U.S.
equities encouraged investors to resume the so-called carry
trade. Japan's yen has gained against all 16 major currencies
tracked by Bloomberg this month amid concern over subprime losses
and credit risks.


Read more at Bloomberg Currencies News

Pound Falls Against Euro, Pares Gains Versus Yen on Carry Trade Unwinding

(Bloomberg) -- The pound declined to a two-week low
against the euro and traded near the weakest versus the yen in
almost two months on speculation investors will unwind carry
trades after the risk of holding corporate debt surged.

The U.K. currency has dropped more than 3 percent against
the yen in July, heading for its biggest monthly decline since
August 2006. Widening losses on securities backed by subprime
mortgages prompted traders to reduce investment in high-yielding
currencies such as the pound using funds borrowed in Japan. U.K.
interest rates are the highest among Group of Seven economies.


Read more at Bloomberg Currencies News

Japanese Wheat Prices May Rise 10 Percent on Global Rates, Official Says

(Bloomberg) -- Japan's domestic wheat prices may
rise around 10 percent this year, the first annual gain in 24
years, hurting noodle makers which may not be able to pass on
the higher cost to customers.

The government may allow the increase as it seeks to bring
local prices more in line with world markets and after futures
in Chicago, the world benchmark for the commodity, soared to a
record, Hirotaka Mori, an agriculture ministry official who
oversees import policy, said in an interview in Tokyo.


Read more at Bloomberg Commodities News

UPDATE 1-Japan Fast Retailing to open big London Uniqlo shop

(Reuters) - Fast Retailing, one of Japan's largest retailers with a
nationwide chain of more than 700 Uniqlo shops, has pledged to
invest up to 400 billion yen over the next three
years on mergers and acquisitions in a bid to double annual
sales to 1 trillion yen by 2010.




The clothing retailer unveiled a $900 million bid for Jones
Apparel Group's upscale clothing chain Barney's New York
Inc. in early July.


Read more at Reuters.com Mergers News

Kirin Says Talks Continue on Investment in San Miguel Australia Drink Unit

(Bloomberg) -- Kirin Holdings Co., Japan's biggest
beermaker, said it remains in talks to invest in San Miguel
Corp.'s Australia dairy and juice unit.

Kirin will buy as much as 49 percent of San Miguel's
National Foods Ltd. for A$1.2 billion ($1 billion), the
Australian Financial Review reported today, without saying
where it obtained the information.


Read more at Bloomberg Emerging Markets News

Tunisia Central Bank, Kingboard, Hong Long, Sri Lanka: Asia Bond Alert

(Bloomberg) -- PT Mobile-8 Telecom, an Indonesian
mobile-phone operator that counts Qualcomm Inc. as an investor,
and Hong Long Holdings Ltd., a Chinese developer, are among
borrowers seeking to sell at least $5.6 billion of bonds in Asia,
according to data compiled by Bloomberg.

Governments and companies in Asia sold $43.8 billion of
debt denominated in dollars, euros and yen this year, up from
$38.2 billion a year earlier, Bloomberg data show. Sales of
Samurai bonds, yen debt sold by foreign entities in Japan, rose
to 1.4 trillion yen ($11.8 billion), from 741 billion yen in the
whole of 2006.


Read more at Bloomberg Bonds News

Japan Shares Fall on Ruling Party's Election Defeat, U.S. Subprime Concern

(Bloomberg) -- Japanese stocks dropped after
Japan's ruling party suffered a worse-than-expected electoral
defeat and U.S. residential investment slumped, raising concern
the world's largest economy will slow.

Sony Corp. slid and Nintendo Co. extended its two-day loss
to 9.6 percent, leading exporters lower after the yen advanced
to the highest against the dollar in more than three months,
reducing the value of their overseas sales.


Read more at Bloomberg Stocks News

Bank Rakyat, Bharat Heavy, China Life, Hana: Asia Ex-Japan Equity Preview

(Bloomberg) -- The following stocks may rise or
fall today in Asian markets, excluding Japan. This preview
includes news that broke after markets closed on July 27. Prices
are from the local market's last close. Stock symbols are in
parentheses after company names.

PT Bank Rakyat Indonesia (BBRI IJ): Indonesia's biggest
lender by market value said profit in the first half rose 17
percent as it expanded lending to companies and consumers in an
accelerating economy. Net income increased to 2.36 trillion
rupiah ($255 million) in the six months ended June 30, from 2.01
trillion rupiah a year earlier. The shares fell 200 rupiah, or
3.2 percent, to 6,100.


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Japanese PM suffers election drubbing but stays on

(Reuters) - TOKYO, July 30 - Japanese Prime Minister Shinzo
Abe's conservative ruling camp suffered a crushing defeat in
upper house elections on Sunday, but the 52-year-old hawkish
leader insisted he would stay in his job despite the bashing.




"I am determined to carry out my promises although the
situation is severe," Abe said, after acknowledging that he was
responsible for the huge loss.


Read more at Reuters.com Bonds News

Corporate Bond Premiums Soar, Sales Canceled, As Investors Shun Risky Debt

(Bloomberg) -- Japanese corporate bond risk rose to
the highest in more than two years and debt sales faltered
globally as investors shunned all but the safest of debt.

Tyco Electronics Ltd. canceled a bond offering. DAE
Aviation Holdings Inc. scrapped plans for a loan. Credit-default
swaps on Goldman Sachs Group Inc. and Bear Stearns Cos. rose to
records on concerns investment banks will be stuck with high-
yield, high-risk debt that they are unable to sell. The rout
spread to indexes gauging the risk of owning everything from
bank loans to emerging market debt.


Read more at Bloomberg Bonds News