Japan stock market week to Jan 22, 2007

Tokyo rebounded in the week ended January 22 following mixed moves. The Nikkei 225 was up 1.2% to close at 17424.18, the highest mark since April 10, 2006, while the Topix index rose 1.5%. The higher market was supported by the yen's weakness against the US dollar and the euro, the decline of crude oil price and the Bank of Japan's decision to maintain the current levels of interest rates against the general expectation for a hike. The news eliminated the previously broad investor worries regarding the impact of a possible rate increase on the economy and currencies and allowed them to focus again on the expected solid earnings reports of leading companies due later this month. Domestic economy-oriented stocks, including banks, real estates and wholesalers, met buying interests.

The pharmaceutical index ended up 1.2%, performing in line with the market. Kyorin rose 8.6%, on a media report that it plans to commence overseas clinical trials of KRP-105, an anti-hyperlipidemia agent, in the fiscal year ending March 2008. Since another anti-hyperlipidemia drug KRP-101 at Phase II evaluation abroad could not prove a significant efficacy against existing drugs, the company plans to develop KRP-105 as a backup compound with priority. After KRP-105's proof-of-concept is established, the company plans to seek possible out-licensing of the compound.

Kissei ended 6.3% higher, responding to its announcement that the US New Drug Application in for silodosin, a treatment for dysuria-associated benign prostate hypertrophy, is likely to be filed in early 2008 by the Japanese firm's licensee, Watson, which is set to complete a Phase III clinical trial in the USA during the fall. Silodosin was marketed in Japan in May 2006 under the brand name Urief in tandem with Daiichi Sankyo. The drug is in a Phase III clinical study in Europe by licensee Recordati of Italy.