Japan credit default swap spreads wider on weak stocks

Japanese credit default swap spreads were generally wider this week following weakness in stock prices, but dealers said participants with short positions have helped support the derivatives market and dampened the widening trend.

The Nikkei closed on Thursday near its 20-year closing low of 8,303.39 as US president George Bush’s continued threat to attack Iraq worsened the mood on the stock market. Negative earnings news in Japan also contributed to the deterioration of sentiment.

Computer maker Fujitsu earlier this week said it had made losses of ¥24.9 billion ($209 million) in the third quarter of 2002. Shares in the company weakened on the news and the cost of its debt protection widened further due to activity linked