Weekly Decline of 2.6% in Nikkei

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

Stocks in Japan traded lower and closed again below 10000, after consumer prices fell in May. Nippon Yusen expects to beat profit forecasts on higher shipping charges. Toyota is planning to resume production in China early next week.

[R]5:00 PM Tokyo, Japan – Stocks in Japan traded lower and closed again below 10000, after consumer prices fell in May. Nippon Yusen expects to beat profit forecasts on higher shipping charges. Toyota is planning to resume production in China early next week.[/R]

Decline in Japanese stocks continued after a government report showed that consumer prices fell at a slower pace in May. Weak global economic outlook also contributed to the declines.

The Nikkei 225 Index in Tokyo lost 190.86 or 1.92% to 9,737.48, closing below the 10,000 mark for the sixth consecutive week. Of the stocks in the index, 21 increased, 199 declined and 5 remained unchanged.

The broader Topix lost 1.4% to close at 867.30 and for the week, the Nikkei declined 2.6% and the Topix dropped 2%.

Japan’s consumer price fell at a slower pace in May according to a governmental report. The slowing of the pace however was not enough to warrant easing of pressure on the central bank to fight and control deflation.

Consumer prices, excluding fresh food, dropped 1.2% from a year earlier, marginally lower than the 1.5% decline in April, the statistics bureau said in its report today in Tokyo.

Earlier this month Finance Minister Yoshihiko Noda said that he wants prices to rise more than 1%.

In Tokyo, core prices fell 1.3% in June from a year earlier, after dropping a revised 1.5% in May. The bureau releases figures for the capital a month earlier than the nationwide data.

Nippon Yusen K.K., Japan’s largest shipping line by sales, expects to beat its own profit forecast for its container unit for the year after introducing peak-season surcharges.

“The company is planning to add an extra $200 per 20-foot container as surcharge on Asia-North America routes beginning June through September as rebounding demand allows the levy to be introduced. The company did not include this levy in its profit forecast,” said Mikitoshi Kai, the company’s head of investor relations, in an interview in Tokyo on June 24.

Nippon Yusen had predicted a 500 million yen as pretax profit from container shipping in the year ending March 2011, compared with a loss of 55.4 billion yen last fiscal.

Toyota Motor Corp, the world’s largest carmaker, is planning to restart production at its plant in Guangzhou early next week after employees agreed to return to work at Denso Corp after a strike this week, said Liu Peng, a spokesman for the automaker in Beijing.

Sadayoshi Yokohama, a spokesman for Aichi, Japan-based Denso, said the workers have returned to work even as talks are continuing over the wages dispute. The factory resumed normal operations this afternoon, he said.

Nikkei Movers

Dai Nippon Printing Co., Ltd led gainers in the Nikkei 225 Stock Average with a rise of 1.4% followed by The Kansai Electric Power Company, Incorporated 1.4%, Oki Electric Industry Company, Limited 1.2% and Shionogi & Co., Ltd 1.1% and Teijin Ltd 1.0%.

Shinsei Bank, Limited led the decliners in the Nikkei 225 Stock Average with a loss of 7.8% followed by Yokogawa Electric Corporation 6.4%, Tokyo Electron Limited 5.6%, Clarion Co Ltd 5.1% and Nisshin Steel Co., Ltd 5.0%.

Other Movers

Nissan Motor Co., Ltd dropped 2.2% to 643.00 yen.

Nomura Holdings, Inc dropped 1.5% to 517.00 yen after the company reported Friday that three of its executives earned more than 100 million yen in compensation in fiscal 2009, with President Kenichi Watanabe receiving 299 million yen including stock options.

Toyota Motor Corporation fell 1.8% to 3,135.00 yen.