Japan Export Slows in May; Nikkei Gains

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
24 Jun, 2010
New York City

Stock indexes in Japan were nearly flat in a choppy trading. Export growth slows for the third month in May to 32%. Nissan Motor has faces another strike at its China parts unit.

[R]5:00 PM Tokyo, Japan – Stock indexes in Japan were nearly flat in a choppy trading. Export growth slows for the third month in May to 32%. Nissan Motor has faces another strike at its China parts unit. Toyota further localizes North American manufacturing leadership. Sony-Ericsson releases cut price model for Android phone.[/R]

Indexes in Japan were nearly flat in a choppy trade but gained a little after trading companies rallied on expectations Australia’s new Prime Minister will compromise on the resource profit tax. Mitsubishi Corp, the nation’s largest commodity trader that owns mining interest in Australia gained the most in the first session.

The Nikkei 225 Stock Average closed higher 4.64 or 0.05% to 9,928.34 and of the stocks in the index, 99 increased, 105 declined and 21 remained unchanged. The broader Topix lost 0.1% to close at 879.77.

Export growth slowed for the third month in May as indicated by a report from the Finance Ministry in Tokyo today. The report showed that shipments abroad advanced 32.1% from a year earlier but declined from 40.4% growth in April.

The strengthening of yen against other major currencies this quarter also adds to the woes as competitiveness of the exporters is compromised by a higher yen.

Nissan Motor Co’s production at its China unit in Guangzhou was disrupted by a strike for two hours yesterday because of a strike at its parts plant. The strike which began on June 22 did not affect production till yesterday, and has since ended according to the company’s spokesman Akihiro Nakanishi.

“Given China’s rapid economic growth, the possibility that a problem like this would occur was well within our expectations,” said Satoshi Ozawa, an Executive Vice President of Toyota at the company’s annual shareholder meeting today in Tokyo.

Sakata Seed Corporation, a Japanese seed wholesaler, is expecting that rising Indian demand from its disease-resistant seeds will help the company grow three-fold sales.

“About a quarter of the seeds used in India are F1 or disease-resistant hybrid seeds, I see that proportion increasing to more than 50% as Indian economy grows and shifts from cheaper seeds that are produced through open pollination,” said CEO Hiroshi Sakata in an interview in Tokyo.

Political parties in Japan began campaigning for the Diet’s upper house with a focus on tax reforms. A majority in the upper house will help the ruling party to pass any legislation.

The Finance Minister Yoshihiko Noda wants to raise taxes for high income earners and said the tax policy should be guided by egalitarian thinking, told a newspaper in his interview. The government’s tax panel will discuss changes to the system after parliamentary elections on July 11, he said in the interview, as reported by Wall Street Journal.

Nikkei Movers

Sumitomo Realty & Development Co., Ltd led gainers in the Nikkei 225 Stock Average with a rise of 2.8% followed by Softbank Corp 2.7%, Kajima Corp 2.3% and Okuma Corp 2.3% and Nippon Express Co Ltd 2.2%.

Sanyo Electric Co., Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 3.1% followed by Mitsubishi Paper Mills Limited 2.6%, Asahi Glass Company, Limited 2.6%, Clarion Co Ltd 2.5% and Unitika Ltd 2.4%.

Other Movers

Elpida Memory, Inc dropped 2.3% to 1,530.00 yen and Sakata Seed Corp the seed wholesaler fell 0.5% to 1,187.00 yen.

Sony Corporation fell 1.1% to 2,493.00 yen after the company is releasing a cut price Android phone for less than $250.

Sumitomo Realty & Development Co., Ltd, the developer, advanced 2.8% to 1,672.00 yen.

Toyota Motor Corporation fell 0.7% to 3,195.00 yen after the carmaker said in an organizational move providing more regional autonomy to Toyota''s North American manufacturing operations, the company is making appointments to increase local leadership at its plants.