Tokyo stocks to February 11, 2008

Tokyo retreated in the week ended February 11 (four trading days only because February 11 was a national holiday in Japan). The Nikkei 225 dropped 6.1% to the threshold 13,000 level and the Topix index closed off 5.7%. Investors worried about Japanese companies' earnings prospects because some export-driven firms revised down their projection for the current fiscal year when they reported their third-quarter results due to expectations of lower demand in the USA and Europe. The news that machinery orders in 2007 declined 4%, the first drop in five years, caused machinery and capital goods stocks to fall. During the week, the pharmaceutical index was down 2.8% but outperformed the market.