Market Updates

Nikkei Falls 2.9%; Komatsu to Double Output

Chandrasekhar Atreya
16 Jul, 2010
New York City

    Stocks in Japan fell on gloomy outlook in the U.S. Toyota and Nissan plan to expand output in Latin America. Komatsu plans to double output. Japan delays import of wheat. Demand for services falls in May. A new rail link from central Tokyo to Narita airport will cut travel time.

[R]5:00 PM Tokyo, Japan – Stocks in Japan fell on gloomy outlook in the U.S. Toyota and Nissan plan to expand output in Latin America. Komatsu plans to double output. Japan delays import of wheat. Demand for services falls in May. A new rail link from central Tokyo to Narita airport will cut travel time.[/R]

Stocks in Japan traded lower after investors booked profits before a long weekend, worried that the yen could advance further after poor economic indicators in the U.S. supported and lowered economic view by the Fed.

The financial markets in Japan are scheduled to be closed Monday.

The benchmark Nikkei 225 Stock Average lost 2.86% or 277.17 to close at 9,408.36 while the broader Topix lost 1.9% to close at 840.58. This week the Nikkei lost 1.8% and the Topix fell 2.4%.

The Nikkei index has closed below 10000 for the ninth consecutive week making it the longest such streak since June 2009.

The U.S. government said Thursday its factory output dropped 0.4% in June, the most in a year, because of a slump in production of automobiles, processed foods and home-building materials.

Toyota Motor Corp and Nissan Motor Co are planning to invest $600 million each to expand production lines in Latin America to meet growing demand.

Toyota is spending $600 million on a new car plant in Sao Paolo state in Brazil, the company said in a statement. Nissan said it is spending $600 million to expand its Mexican production to build three new models, CEO Carlos Ghosn said in Mexico City yesterday.

Komatsu Ltd, the world’s second-largest maker of earth movers, is planning to double output this year to meet surging demand from China and Indonesia.

Komatsu will be manufacturing about 85,000 building and mining machines in this fiscal ending March 31, 2011, compared with 44,000 a year earlier, Executive Officer Masahiro Uegaki in an interview at the company headquarters in Tokyo.

The Japanese government which controls overseas purchases of wheat and domestic sales to stabilize supplies has decided to end the state stockpiling system of holding 1.8 months of demand from October 1.

Japan is delaying import tenders for wheat until local flour mills decide how much they will buy under the new system. The Ministry of Agriculture, Forestry and Fisheries, which tenders almost every week to purchase milling wheat from the U.S., Canada, and Australia, has skipped buying so far this month because end users are cautious about setting their requirements under the new system, Shirara Shiokawa, Director at the ministry’s grain trade division said in an interview in Tokyo yesterday.

Demand for services in Japan has fallen in May after it advanced in April, a government report showed.

The tertiary index, which captures 63% of the economy, slid 0.9% in May from April, when it gained a revised 2.4%, the Trade Ministry said in Tokyo today.

Retail sales in the world’s second-largest economy have started declining as the government incentives for cars and home appliances started to wear off. This data today comes in the wake of reports for May showing wages declined in Japan and unemployment rate has worsened.

Japan’s regulator for competition has extended its antitrust review period of BHP Billiton and Rio Tinto Group’s proposed 50:50-venture for Australian projects, after European and Asian steelmakers opposed the plan on concerns about lack of competition in the market.

After the expiry of its initial 30-day review period, the venture can be subject to a secondary antitrust review, the Japan Fair Trade Commission said today in a statement on its Web site.

Keisei Electric Railway Co will open a new railway line from Tokyo to Narita International Airport tomorrow, reducing the travel time to Japan’s international gateway.

The new line will ferry passengers between Nippori station on Tokyo’s loop line and the airport in 36 minutes, reducing the time by about 15 minutes, the company said in a statement in Tokyo today.

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