Nikkei Slips; Retail Sales Growth Declines

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

Stocks fall across all sectors dragging the indexes lower. Retail sales in Japan grew at the slowest pace since January, says a government report. The yen fell against the euro after the G-20 meeting endorsed targets to reduce budget deficits.

[R]5:00 PM Tokyo, Japan – Stocks fall across all sectors dragging the indexes lower. Retail sales in Japan grew at the slowest pace since January, says a government report. The yen fell against the euro after the G-20 meeting endorsed targets to reduce budget deficits. Japanese car makers report increased vehicle production in May. Takashimaya Co plans to relocate business to Asia.[/R]

Stocks in Japan fell across all sectors dragging the broader Topix Index down for the fifth consecutive day.

The Nikkei 225 Stock average closed 0.45% lower or 43.54 to 9,693.94 and of the stocks in the index, 46 increased, 163 declined and 16 were unchanged. The broader Topix slid 0.8% to close at 860.80 with 29 of the 33 stock groups declined.

Japan’s retail sales rose 2.8% in May from a year earlier, the slowest pace since January this year, according to statistics released by the Trade Ministry in Tokyo today.

Cars and household appliance sales led the month-over-month decline with car sales declining by 5.9% and 7.9% decline in sales of household appliances like flat-screen TVs and refrigerators.

G-20 leaders in a statement released after the meeting in Canada said that banks need to have significantly higher capital while giving these lenders more flexibility to implement the changes.

The leaders said they will seek a final agreement on the new standards for capital at a summit in Seoul in November, when the Basel Committee of Banking and Supervision, made up of international central bankers, will meet and propose a road map. According to the meeting consensus, all countries should adopt the new standards by the end of 2012, with a transition period when the banks will be allowed to phase in the capital increases.

Leaders at the summit have also agreed to cut national budget deficits in half by 2013. In a reversal from the unity of the past three summits, the leaders decided to adopt differentiated and tailored economic policies for each country.

The yen fell for the first time in a week against the euro after the G-20 leaders endorsed targets to reduce budget deficits.

Japan’s carmakers, Toyota Motor Corp, Honda Motor Co, and Nissan Motor Co, confirmed increased vehicle production globally as they benefited by rising demand in China and U.S.

Toyota, the world’s biggest carmaker, boosted production by 28% to 568,004 vehicles last month from a year earlier, the company said in a statement today. Exports at the Toyotas City, Japan-based carmaker rose by 15% to 115,280 vehicles.

Output at Honda increased by 43% to 278,543 vehicles, the Tokyo-based company said in its statement today. Nissan said that production of cars and light trucks rose by 42% to 309,287 units in May from a year earlier.

Takashimaya Co, a Japanese department store operator said is it planning to sell its U.S. assets and shift operations to the faster growing Asian market.

The company will sell its property on New York’s fifth avenue to a unit of Thor Equities and book a one-time gain of 11 billion yen this fiscal from the sale, according to the company’s filing with the Tokyo Stock Exchange today.

Nikkei Movers

MEIJI Holdings Co., Ltd led gainers in the Nikkei 225 Stock Average with a rise of 1.9% followed by Yamaha Corporation 1.8%, Oki Electric Industry Company, Limited 1.2% and Eisai Co., Ltd 1.1% and Denso Corporation 1.1%.

Shinsei Bank, Limited led the decliners in the Nikkei 225 Stock Average with a loss of 4.8% followed by CSK Holdings Corporation 4.7%, SANYO Electric Co., Ltd 4.0%, Showa Shell Sekiyu K.K 3.6% and Mitsui O.S.K. Lines, Ltd 3.1%.

Other Movers

Dai-ichi Life Insurance Co fell 4.0% to 120,200.00 yen.

Ford Motor Company dropped 0.2% to 10.75 yen after the company recently reported it is investing $450 million or 15 billion baht in a new state-of-the-art passenger vehicle manufacturing plant in Rayong, Thailand, scheduled for completion in 2012.

Mizuho Financial Group, Inc dropped 2.6% to 149.00 yen after the company announced today the launch of its global offering to raise 798 billion yen equity tap, based on today’s 153 yen closing price.

Toyota Motor Corporation fell 1.1% to 3,100.00 yen after the carmaker said on Monday its global output rose 28% in May from a year earlier to 568,004 vehicles.