Japan stock market week to July 9, 2007

Tokyo stretched a gain in the week to July 9. The Nikkei 225 was up 0.6%, to close at the 18,261.98, the highest finish since May 2, 2000, while the Topix index rose 0.7%. The market moved within a narrow price range early in the week because domestic investors refrained from taking positive action due to uncertainties about the outcome of the House of Councillors election scheduled for late July. However, the market turned higher toward the end of the week, thanks to resumed recognition of the bright outlook for Japanese corporate earnings on a report that machinery orders in May advanced 5.9% from the previous month, better than the average projection of a 2.8% increase. Electronics manufacturers, autos and machinery makers received buying attention. The pharmaceutical index went up 1.4%, outperforming the market.

Hisamitsu leapt 4.7% after it reported strong results for the first quarter (March-May) of the financial year ending February 2008 on continued expansion of its mainstay, prescription anti-inflammatory transdermal agent Mohrus Tape (ketoprofen) and a reduction in advertising and marketing expenses. Turnover was up 7% year-on-year to 29.3 billion yen ($237.3 million) and operating income was up 33% to 8.4 billion yen. Net income rose 30% to 5.3 billion yen, reflecting a decrease in extraordinary expenses associated with the sale of fixed assets and retirement allowances.

Astellas climbed 1.9%, after it announced, together with Kyoto University, that it will co-research immunoregulation technologies and next-generation drugs at the government-sponsored innovation center . The aim is to discover new drugs to treat intractable diseases including rheumatoid arthritis and Crohn's, in addition to allergies. The share performance was also helped by news that The European Society of Hypertension meeting presented studies to compare the protective potential of the two angiotensin receptor blocker anti-hypertensive agents, Boehringer-Ingelheim's telmisartan (Micardis) and Merck's losartan (Cozaar) in hypertensive patients with diabetic nephropathy. The results showed that telmisartan reduced proteinuria to a greater extent than losartan. Astellas in-licensed telmisartan and markets the drug in Japan.