Japan stock market week to April 30, 2007

Tokyo retreated in the week to April 30 (four trading days as April 30 was a national holiday in Japan), recording a weekly pullback for three weeks in a row. The Nikkei 225 was off 0.3% to close at the 17,400 level, while the Topix index lost 0.3%. Investors generally sat on the fence prior to the start of the long "Golden Week" holiday season, futher discouraged by a lack of new trading incentives and concerns that Japanese companies would unveil conservative earning projections. The strong New York markets and the yen's depreciation against the US dollar prevented the market from suffering a deep correction but Japan's weaker-than-projected March industrial production, which fell 0.6% from last month, also worried investors. The pharmaceutical index ended down 1.1%, underperforming the market.

Chugai gained 2.2% after it reported surprisingly strong results for the first quarter of the fiscal year ending December 2007, thanks to a surge in sales of the influenza drug Tamiflu (oseltamivir) due to Japanese government stockpiling, an increase in royalties and lower-than-expected sales, general and administrative costs. The company has raised its forecast for the first half but maintains its full-year projection due to uncertainties about the sales contribution of anticancer drug Avastin (bevacizumab), which is waiting for a price listing on the National Health Insurance following approval in April 2007, as well as the impact of the March 2007 restriction on Tamiflu's usage in teenagers after it was linked to cases of abnormal behavior. The firm's first-quarter 2007 sales leapt 17.9% year-on-year to 91.1 billion yen ($761.9 million) with revenue from Tamiflu surging 54.5% to 23.8 billion yen. Operating income jumped 44.9% to 20.4 billion yen, achieving 97% of the previous target for the first half, as net income leapt 27.8% to 13.3 billion yen, exceeding the previous first-half target of 12.0 billion yen.