Japan stock market week to July 21, 2008

Tokyo retreated once again in the week to July 21 (four trading days only as July 21 was a national holiday in Japan). The Nikkei 225 declined 1.6%, to close below the 13,000 mark amid sluggish trading volume, while the Topix index lost 2.2%. Concerns about the US financial sector and credit markets resurfaced in light of massive net losses associated with sub-prime loan-related investments of major financial companies in the second quarter. Investors were also discouraged by a report that the Bank of Japan had revised down its forecast for the country's economic growth for the fiscal year ending March 2009 to 1.2% from the previous forecast of 1.5%, assuming a higher than previously projected inflation rate of 1.8% and flat interest rates. The pharmaceutical index fell 1.5%, performing in line with the market.

Shionogi dropped 1.5%, without finding support from the approval of Differin Gel (adapalen), a topical treatment of acne vulgaris, originated by Galderma. The two firms will co-promote the drug, while the former retains exclusive sales and distribution rights for the product for eight years following the launch. Differin contains a naphthoic acid derivative that possesses retinoid-like activities and is expected to bind to specific retinoic acid nuclear receptors and normalizes the differentiation of follicular epithelial cells.