JIN-172 -- Online Brokerages Hit it Big During Market Rally

J@pan Inc Magazine Presents:
T H E J @ P A N I N C N E W S L E T T E R
Commentary on the Week's Business and Technology News

Issue No. 172
Wednesday, March 13, 2002


++ Viewpoint: Online Brokerages Hit it Big During Market Rally
++ Noteworthy News
- Honeymoon ends quickly for Xbox
- Microsoft to select 'model cities' in e-Japan initiative
- Cash-on-delivery, i-mode fuel rise in Amazon.com customers
++ Events

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++ VIEWPOINT: Online Brokerages Hit it Big During Market Rally

The recent stock market rally has been a boon for online brokerages.
"We are having record high trading volume days recently," Monex
chief Oki Matsumoto told J@pan Inc on Tuesday. Matsui, DLJdirect
SFG and E*Trade have also set single-day records for trading volume
in the last two weeks.

The Asahi Shimbun reported that Matsui Securities reported a record
46.7 billion yen in trading volume one day last week. And DLJdirect
SFG Securities set a company record with 31.7 billion yen last Monday.

The rise in online trading is just one factor contributing to the
nearly 8 percent rise of the Nikkei index from 10,587.83 at the end of
February to 11,415.31 at the close of the Tokyo markets on Wednesday.
But, as the Asahi Shimbun noted, it shows that individual investors
are joining the government and companies buying back their own stock
to fuel the recent stock rise.

Foreign brokerages are getting behind the rally as well. Goldman Sachs
strategist Kathy Matsui was quoted by Bloomberg as writing last week:
"We believe it may be risky to be overly pessimistic at this time."
Merrill Lynch and Credit Suisse First Boston also recommended last
week that its clients buy more Japanese stocks, Bloomberg reported.

And what about the government's new rules discouraging short selling?
Are they helping the stock markets rally? "In a sense, yes," said
Matsumoto. "The new rule has cast some influence on the consensus of
traders. As Keynes said, the stock market is like choosing the winner
in a beauty contest, and tastes can change quickly without a firm

So enjoy the beauty contest while it lasts. You can bet that before
the last cherry blossoms float to the ground, today's beauties will be
receiving the cold shoulder once again.

-- Bruce Rutledge

"Special Report: Online Brokers" (June 2001)

"Online Brokers -- Changing of the Guard" (June 2001)

"Online Brokers -- Staying Alive" (June 2001)

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** Honeymoon ends quickly for Xbox

Extract: Microsoft's Xbox was the best-selling game console in Japan
for the week of February 18-24, after its February 22 launch. Alas,
that seems so long ago. The latest statistics from Nikkei BP/GfK
SalesWeek 3200 for the week of February 25-March 3 show Xbox in
third place and Sony's PlayStation2 back in first.

Sales of Xbox were down more than 25 percent week on week, while
Sony's sales jumped almost 20 percent. Nintendo came in second with
a 4.8 percent week-on-week rise. Nikkei BP did not disclose total
units sold.

The next week (March 4-10) will likely by tough for Xbox too, as false
reports that it had recalled its Xbox machines in Japan circulated.
What did happen, according to Microsoft, was that it had a "small
number of inquiries from customers reporting small scratches to the
outside edge of some game disks after use in the Xbox consoles."

Just a small problem.

"Xbox Courts Japan" (September 2001)


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** Microsoft to select 'model cities' in e-Japan initiative

Extract: The e-Japan project to put more public information online
and build the electronic infrastructure for the central and local
governments is said to be worth about 2 trillion yen. And Microsoft
is out to get as big a piece of it as possible.

The Nikkei announced today that the Japanese arm of Microsoft is
going to build the electronic infrastructure of several dozen
"model cities" in hopes of piquing the interest of other
municipalities. Microsoft also recently opened its seventh
regional office in Japan. It looks like the software giant is
out in front of a trend to find business opportunities far
from Tokyo.

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** Cash-on-delivery, i-mode fuel rise in Amazon.com customers

Extract: Amazon.com has attracted 800,000 customers through its
Japanese-language site in the first 17 months of business, according
to Bloomberg. The wire service quoted a senior executive of the
Seattle-based book retailer as saying, "I see signals of e-commerce in
Japan exploding." The executive also said that Amazon has seen more
customers since it introduced cash-on-delivery payments in November
and launched an i-mode site -- two crucial components to selling
online in tiny-screen-loving, credit-card-loathing Japan.

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+ No events this week
SUBSCRIBERS: 5,240 as of March 13, 2002

Written by Bruce Rutledge (bruce@japaninc.com)
Edited by J Mark Lytle (mark@japaninc.com)


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