Nikkei Retreats after 3-Day Rally

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
07 Jul, 2010
New York City

Stocks in Japan fell on weaker than expected U.S. service industry expansion. Softbank Corp leads new mobile services subscriber additions in June. Nissan Motor said waiting period for some auto models surged to five months in Thailand. Sony slashes E-Reader prices.

[R]5:00 PM Tokyo, Japan – Stocks in Japan fell on weaker than expected U.S. service industry expansion. Softbank Corp leads new mobile services subscriber additions in June. Nissan Motor said waiting period for some auto models surged to five months in Thailand. Sony slashes E-Reader prices.[/R]

Stocks in Japan retreated after services industry in the U.S. expanded at a slower pace than expected in June.

The Nikkei 225 Stock Average fell 0.63% or 58.39 to close at 9,279.65 snapping three days of gains. Of the stocks in the index 50 increased, 166 declined, and 9 remained unchanged. The broader Topix Index fell 0.7% to close at 841.51.

China, the world’s second-largest corn consumer, may import 10 times more corn than they do now, by the year 2015, after economic growth raises demand for meat and feed, Marubeni Research Institute said.

“Imports may expand to 10 million tons in 2015, from the 1 million ton forecast for the current year, as the Asian nation turns to cheap corn supplies from overseas for feed. China is not considering maintaining its self sufficiency for corn as the grain is no longer an important food crop for the people of China,” said Akio Shibata, Chief Representative for the research unit of the Tokyo-based Marubeni Corp, Japan’s biggest grain trader.

Softbank Corp, the exclusive provider of iPhone in Japan and the nation’s third-largest mobile operator, added more new customers than their rivals NTT DoCoMo Inc and KDDI Corp for the third straight month in June, helped by demand for the latest model of Apple Inc’s iPhone.

Softbank is spending a record amount on network improvements so as to handle growing data traffic as users buy handsets that can surf the internet and download movies, music and games on the go.

Softbank added a net of 229,500 new subscribers in June, the company said in a release today. DoCoMo added 164,600 and KDDI added 61,300 new subscribers, the companies said in their separate statements.

Auto output in Thailand doubled to 620,116 vehicles in the first five months of this year according to details collected by the Thai Automotive Club trade group. Japanese carmakers restarted idling production lines as global demand recovered from a recession and low borrowing costs boosted demand at home.

Nissan Motor Co said that waiting list for some of the car models is as much as five months as the nation’s makers scramble to increase production by 60%.

“About 8,000 buyers have ordered the Micra compact car that costs around 375,000 baht and the waiting period is now as much as five months,” said salesman Wiwat Manuthad, of Nissan’s showroom Siam Motor Sales in Bangkok.

Toyota Motor Corp said it will extend the time it takes to develop its vehicles by an average of four weeks in a bid to ensure quality following a spate of recalls.

“The fast growth of the past decade has been too much in some areas for the company to keep up with,” Executive Vice President Takeshi Uchiyamada told a group of reporters at Toyota headquarters on Wednesday.

Nikkei Movers

JX Holdings Inc led gainers in the Nikkei 225 Stock Average with a rise of 3.3% followed by Fukuoka Financial Group, Inc 3.2%, The Japan Steel Works Ltd 2.3% and Daikin Industries Ltd 2.2% and Mitsui & Co Ltd 2.1%.

Oki Electric Industry Company, Limited led the decliners in the Nikkei 225 Stock Average with a loss of 5.0% followed by Mizuho Trust & Banking Co, Ltd 3.9%, Nitto Boseki Co Ltd 3.5%, Resona Holdings, Inc 3.4% and Nomura Holdings, Inc 3.2%.

Other Movers

Fukuoka Financial Group, Inc added 3.2% to 383.00 yen after the banking service company was upgraded to “buy” from “hold” at Deutsche Bank AG.

Honda Motor Co., Ltd fell 1.6% to 2,524.00 yen.

Kawasaki Kisen Kaisha, Ltd dropped 3.0% to 351.00 yen after the shipping line slipped as bulk cargo rates fell. Mitsui O.S.K. Lines, Ltd fell 2.0% to 570.00 yen.

Sanyo Electric Co., Ltd fell 1.6% to 116.00 yen after the company said it will be selling its semiconductor subsidiary, which is running at a loss, to On Semiconductor Corp.

Sony Corporation dropped 1.6% to 2,321.00 yen and the company cut the price of its E-Reader devices, joining an electronic-reader price war between Amazon.com Inc and Barnes & Noble Inc.