Nikkei Falls 2% Tracking U.S. Losses

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

Stocks in Japan tracked declines in the U.S. markets after a weak consumer confidence and wages declined in May. Daihatsu Motor is planning to market a fuel efficient a mini car next year. Iraq''s cabinet approved Mitsubishi-Shell gas deal.

[R]5:00 PM Tokyo, Japan – Stocks in Japan tracked declines in the U.S. markets after a weak consumer confidence and wages declined in May. Daihatsu Motor is planning to market a fuel efficient a mini car next year. Iraq''s cabinet approved Mitsubishi-Shell gas deal.[/R]

Stocks in Japan fell further after increased concerns over funding conditions in European banks sparked the latest sell-off in equity markets. The sentiment suffered further after a report showed a slump in U.S. consumer confidence.

The Nikkei 225 Stock Average fell 1.96% or 188.03 to 9,382.64 and of the stocks in the index, 12 increased, 210 declined and 3 remained unchanged. The broader Topix dropped for a seventh consecutive day, losing 1.3% to close at 841.42 with five stocks falling for every one stock that gained.

Both indexes reached their lowest closing levels since November 30.

New York-based Conference Board said yesterday that its index of U.S. consumer confidence slumped to 52.9 in June.

Japan’s worries increased after a report showed that wages slid for the first time in three months as an earlier report had showed that unemployment rose unexpectedly in May.

Monthly wages in May, including overtime and bonuses dropped by 0.2% from a year earlier to 267,721 yen, the Labor Ministry said in Tokyo today. The report also showed that special cash earnings including bonuses decreased 23.6% in May from a year earlier, while regular pay declined by 0.1%. Overtime income however gained 10.3% as employees had to work more hours to meet rising demand.

Osaka-based Daihatsu Motor Co is planning to introduce a fuel-efficient mini car to compete with the hybrid models to meet demand for such cars in Japan.

“The e:S concept car, which gives as much as 30 kilometer per liter, will be introduced in Japan next year and may also be sold later in emerging markets overseas,” said Daihatsu’s President Koichi Ina in an interview in Tokyo on June 21.

The gasoline-powered has been tested to match the fuel efficiency of Honda Motor’s Insight Hybrid, while trailing behind the performance of Toyota’s Prius, which has been tested to give as much as 38 kilometers per liter.

Sumitomo Mitsui Financial Group Inc, Japan’s second-largest bank by market value, said it is planning to acquire 4.5% of India’s Kotak Mahindra Bank Ltd, as it plans to boost overseas investment and increase banking profit between 20% and 30%.

The Tokyo-based bank will spend as much as $295 million to acquire a stake in Kotak Mahindra Bank Ltd and close the deal by September, Sumitomo Mitsui said in a statement posted on its Web site today.

Sydney-based MGPA, a private equity real estate investment firm that is partly owned by Macquarie Group Ltd, is planning to double its real estate assets in Japan over the next five years to benefit from a recovery in the real estate land prices that have fallen to the lowest level in 36 years.

“Tokyo itself is good investment destination because of its population growth and economic resilience,” said the newly appointed CEO Simon Treacy in an interview yesterday.

Nikkei Movers

Shionogi & Co., Ltd led gainers in the Nikkei 225 Stock Average with a rise of 7.2% followed by Pioneer Corporation 3.4%, Nippon Kayaku Co Ltd 2.9% and Shinsei Bank, Limited 2.7% and Yahoo Japan Corporation 1.2%.

Oki Electric Industry Company, Limited led the decliners in the Nikkei 225 Stock Average with a loss of 7.2% followed by Sapporo Holdings Ltd 6.3%, J. Front Retailing Co Ltd 5.4%, NEC Corporation 5.0% and Tokai Carbon Co Ltd 4.9%.

Other Movers

Canon Inc fell 1.9% to 3,330.00 yen after the office equipment and camera maker said it will create two subsidiaries through share swaps effective Oct. 1 to take full control of strategically important businesses to become more competitive globally.

DeNA Co., Ltd dropped 8.9% to 2,344.00 after the operator of auction and shopping Web sites was downgraded to “hold” from “buy” at Deutsche Bank AG.

Mitsubishi Corporation fell 1.9% to 1,864.00 yen after the commodities trader said Iraq''s cabinet on Tuesday approved a deal with Royal Dutch Shell to capture gas flared at southern oilfields, government spokesman Ali al-Dabbagh said.

Miyachi Corporation dropped 3.7% to 646.00 yen after the laser-welder maker was downgraded to “neutral” from “above average” at Tokai Tokyo Securities Co.

Shin-Etsu Chemical Co., Ltd dropped 4.0% to 4,175.00 yen after the maker of chemicals and resin was downgraded to “neutral” from “outperform” at Mizuho Securities Co.

Weathernews Inc added 3.4% to 1,250.00 yen after the weather forecasting service provider was upgraded “outperform” in new coverage at Cosmo Securities Co.