Nikkei Trades Down 1.3%, Unemployment Rises

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

Stocks in Japan traded down after unemployment rate increased and household spending declined in May. Auto makers in Japan are boosting production as U.S. demand recovers and China demand continues to grow.

[R]5:00 PM Tokyo, Japan – Stocks in Japan traded down after unemployment rate increased and household spending declined in May. Auto makers in Japan are boosting production as U.S. demand recovers and China demand continues to grow.[/R]

The indexes in Japan declined after unemployment increased unexpectedly.

The Nikkei 225 Stock Average lost 1.27% or 123.27 to close at 9,570.67 and of the stocks in the index, 24 increased, 196 declined and 5 remained unchanged. The broader Topix Index dropped 1% to record 852.19 at close in Tokyo.

The yen rose against the dollar and reached its strongest level in three weeks against the euro and has the longest streak of gain against a single currency since January 2009. The yen rose against the euro for the eighth consecutive day.

The unemployment rate reached 5.2% in May for a third straight monthly increase and the household spending also retreated 0.7% in May year-on-year, according to the data announced by statistics bureau in Tokyo today.

Japanese carmakers are boosting production this year as demand recovers in the U.S. and continues to rise in China, the world’s largest auto market. Production at the nation’s 12 vehicle makers increased 31% in May from a year earlier to 708,453 units while exports surged 47% to 340,721 units, according to a statement issued by Japan Automobile Manufacturers Association today.

Cushman &Wakefield, the world’s largest privately held real estate services firm, is focusing on buying assets in Japan as the broker see the property prices bottoming out and then recovering.

“The company’s assets under management in Japan grew 10% to 220 billion yen in June from the last year.

“We bought 50 billion yen worth of office and residential buildings in Tokyo in this period as we shifted our focus to acquisitions,” said Yoshiyuki Tanaka, President of the Japanese asset management unit of the firm.

Japan’s commercial land prices fell as much as 6.1% in 2009, the Ministry of Land, Infrastructure, Transport and Tourism said in its report in March this year.

Nikkei Movers

Oki Electric Industry Company, Limited led gainers in the Nikkei 225 Stock Average with a rise of 2.4% followed by Yamaha Corporation 1.9%, Mizuho Trust & Banking Co. Ltd 1.2% and COMSYS Holdings Corporation 1.1% and Central Japan Railway Company 1.1%.

Credit Saison Co., Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 5.7% followed by Shinsei Bank, Limited 5.1%, Pioneer Corp 4.3%, NSK Ltd 4.2% and Yokogawa Electric Corporation 4.0%.

Other Movers

Canon Inc dropped 2.7% to 3,395.00 yen and Honda Motor Co., Ltd fell 1.3% to 2,647.00 yen.

INPEX Holdings Inc fell 3.8% to 493,500.00 yen after the oil explorer said exploration in Peru is scheduled to begin, with Inpex Corp. taking a 25% interest in one northern jungle block, said the Peruvian state licensing agency for hydrocarbon exploration.

Japan Petroleum Exploration Co., Ltd dropped 2.3% to 3,675.00 yen.

Komatsu Ltd fell 1.3% to 1,645.00 yen after the machinery company will appoint local staff to senior positions at all 16 key subsidiaries in China by 2012, according to a Nikkei Daily morning report.

Nissan Motor Co., Ltd fell 1.8% to 629.00 yen after the company aims to boost its market share in Indonesia to 10%, from the current 5%, CEO Carlos Ghosn said in Jakarta on Tuesday.

Toshiba Corporation fell 1.7% to 452.00 yen after the company plans to expand the manufacturing capacity of its Houston, Texas plant for high-performance drive motors for hybrid plug-in hybrid electric vehicles.