Nikkei Drops; Trade Surplus Narrows

Chandrasekhar Atreya
09 Aug, 2010
New York City

Stocks in Japan dropped on slowing export growth and worries that a slowdown in China may affect exports in the second half. Trade surplus drops unexpectedly in June. Toyota starts Tacoma output at its Texas facility. Itochu Corp acquires 2.75% stake in Aston Resources Pty Ltd.

[R]5:00 PM Tokyo, Japan – Stocks in Japan dropped on slowing export growth and worries that a slowdown in China may affect exports in the second half. Trade surplus drops unexpectedly in June. Toyota starts Tacoma output at its Texas facility. Itochu Corp acquires 2.75% stake in Aston Resources Pty Ltd, Australian company in the process of public offering.[/R]

Japanese stocks dropped after exports to China showed a decline and on the worries that the U.S. unemployment remain near elevated level and may not decline in the near future.

The Nikkei 225 Stock Average dropped 0.72% or 69.63 points to close at 9,572.49. The broader Topix also declined by 0.4% to close at 857.62.

Japan’s current account surplus unexpectedly narrowed in June, second monthly decline in a row, according to data provided by the Finance Ministry. The gap narrowed 18% to ¥1.047 trillion from a year earlier, the ministry said. While exports grew 29% imports expanded 30%.

Bonds in Japan advanced the most in three weeks. China bought 456.4 billion yen more debt than it sold in June, according to the Ministry of Finance.

Toyota Motor Corp added 1,000 workers at its San Antonio plant to build Tacoma pickups using the factory’s full capacity for the first time in the current fiscal year. Lower-than-expected demand for Tundra pickups and the closing of its California joint venture this year led the company to move its Tacoma production to Texas at a cost of $100 million.

Apple Inc will comply with a Japanese government order to provide information on how to avoid the potential risk of some iPod Nano music players catching fire.

The information, which focuses on obtaining and replacing the battery on first-generation iPod Nanos, will be posted in a prominent place on the company’s Web site in the next few days, said Tom Neumayr, a spokesman for Apple on Friday.

Itochu Corp, a Japanese trading company, agreed to buy 2.75% stake in Aston Resources Pty Ltd for A$33 million. The acquisition will give Itochu exclusive negotiation rights to acquire a stake in the Australian resource company’s Maules Creek coal project and market the commodity.

Gainers & Losers

Ebara Corp led the gainers in the Nikkei with a gain of 8.53% to ¥369 followed by Tokai Carbon Ltd 6.61% to ¥484 and Keisei Electric Rail 3.41% to ¥546.

Alps Electric Co led the decliners in the index with a drop of 6.7% to ¥710 followed by Pioneer Corp 5.99% to ¥298 and Sumitomo Metal & Mining Co Ltd 4.7% to ¥1,135.