Japan stock market week to Sept 18, 2006

Tokyo saw a rebound in the week to September 18 (four trading days only because the last was a national holiday in Japan). The Nikkei 225 ended up 0.5%, to close at the 15,800 level, while the Topix index edged down 0.2%. The market's energy was basically weak due to a lack of news developments and the three-day holiday in Japan. However, some investors showed buying interests in select technology issues such as semiconductor manufacturers in view of the yen's weakness against the US dollar and stable movements of New York markets. They also expect possible upward revisions of select companies' earnings forecast for the financial year ending March 2007 with the announcement of first-half results.

The pharmaceutical index was up 4.3%, outperforming the market. Shionogi advanced 7.9% after it unveiled, jointly with the Japanese subsidiary of AstraZeneca, an interim analysis of the post-marketing surveillance of Crestor (rosuvastatin), a treatment for hypercholesterolemia, which confirmed the drug's safety in Japanese patients. The adverse event occurrence frequency was 8.4%, significantly less than the 18.8% shown in data for the drug's Japanese approval. Given the results, both companies are set to initiate fully-fledged marketing of the drug instead of the previously limited program to 1,000 hospitals. The combined medical representatives of the two companies, numbering 2,700, will detail the drug.

Daiichi Sankyo rose 7.1%, reflecting the news that it has decided to transfer to Fuji Photo Film all shares of its subsidiary Daiichi Radioisotope Laboratories, as of October 2. DRL, which develops and markets radiopharmaceuticals and radiochemical compounds, had annual sales of 17.2 billion yen ($146.2 million) in the fiscal year ended March 2006. The drugmaker also agreed with Sekisui Chemical on the transfer of all shares of Daiichi Pure Chemicals, also effective October 2. DPC, which provides clinical test agents, research reagents and fine chemicals, had annual sales of 22.8 billion yen in the fiscal year ended March 2006. The moves represent Daiichi Sankyo's plan to make all non-drug businesses independent by March 2007 to concentrate its management resources on the pharmaceutical business.