Stocks in Japan Fall on Stronger Yen

Chandrasekhar Atreya
21 Jul, 2010
New York City

Stocks in Japan fell after a stronger yen hurt export growth. The BOJ official says increasing financial market volatility is hurting the nation. Mitsubishi UFJ plans to acquire more U.S. banks. Toyota is subpoenaed again in U.S. Heat wave in Japan increases power demand.

Indexes in Japan declined for the fourth consecutive day, reversing earlier gains after a stronger yen. The Nikkei 225 Stock Average lost 0.23% or 21.63 to close at 9,278.83 in Tokyo today. The broader Topix also lost 0.3% to 829.35 with three stocks declining for each gained.

Of the stocks in the Nikkei index, 133 declined and the rest gained.

A Deputy Governor of the central bank said that financial-market volatility is increasing posing risks to the nation’s economic recovery. Earlier the central bank had reported that demand for business loans fell to a five-year low.

“There are still many uncertainties, such as developments in the U.S. and European economies and volatile developments in international financial markets. The quarterly loan-demand index slipped to minus 17 in July from minus 10, matching the lowest level since July 2004,” said Deputy Governor Hirohide Yamaguchi in a speech today.

Mitsubishi UFJ Financial Group Inc said it may spend 500 billion yen or more to acquire more U.S. banks as domestic loan demand falls.

Mitsubishi said it is examining about 7 banks similar to the size of UnionBanCal Corp, for acquisition, said the bank’s head of global banking, Tatsuo Tanaka. The Tokyo-based bank had earlier acquired UnionBanCal after investing $9 billion in Morgan Stanley, as it aims to boost overseas profit by 40% to 1 trillion yen.

More Japanese carmakers follow Toyota and Nissan in planning to introduce plug-in hybrid cars as government tighten emission norms. Honda Motor Co will start selling a battery powered car in 2012 and also mid-size to large plug-in hybrids in Japan and the U.S. by 2012, CEO Takanobu Ito told reporters yesterday in Saitama prefecture just north of Tokyo.

U.S. fuel-economy rules scheduled to be phased from 2015 make the addition of plug-in and hybrids necessary to meet regulator requirements.

Toyota Motor Corp still faces problem of recalls after a U.S. court wanted further scrutiny of potential defects in vehicle steering rods. A federal grand jury in New York issued the company a subpoena to provide documents related to flaws in steering relay rods, the company said in a filing today.

Mori Building City Air Services Co, the helicopter operator that runs a service between downtown Tokyo and Narita airport, may add another service with a third aircraft to meet increasing traffic.

The helicopter unit of Mori Building Co may add an eight-seat helicopter to its two existing helicopters, said Koichi Ueno, Managing Director, in an interview in Tokyo today.

Price of power for delivery during peak hours rose to the highest in two years as jet stream-led heat wave that hit Japan continues, boosting demand for more cooling.

Peak-load power rates have increased to an average 18.4 yen per kilowatt hour for delivery today, up by 1.47 yen from yesterday, according to data compiled by the Japan Electric Power Exchange.