Nikkei Drops; Japan Rates on Hold

Chandrasekhar Atreya
10 Aug, 2010
New York City

Stocks in Japan dropped on reports of slowing imports by China. Bank of Japan kept key rate unchanged and the Japanese government left its outlook for local economy in August the same but lowered the assessment on China.

[R]5:00 PM Tokyo, Japan – Stocks in Japan dropped on reports of slowing imports by China. Bank of Japan kept key rate unchanged and the Japanese government left its outlook for local economy in August the same but lowered the assessment on China.[/R]

Stocks in Japan fell and the indexes declined for the third day in a row after China reported its imports grew at the slowest pace in nine months.

The Nikkei 225 Stock Average declined 0.22% or 21.44 to close at 9,551.05. The broader Topix fell 0.3% to close at 854.68 with almost three stocks retreating for everyone that gained.

In the Nikkei 225 Stock Average, 68 stocks recorded a gain, 138 dropped while 19 were unchanged.

The government in Japan kept its assessment of the economy unchanged for August but cut its expectation of factory output after production fell across all sectors. The government also lowered its assessment of China its largest trading partner, for the first time in 18-months, citing moderate growth in that nation’s economy.

“The economy has been picking up steadily and the foundation for a self-sustaining recovery is being laid,” the Cabinet Office said in its monthly report in Tokyo today.

The Bank of Japan’s policy board headed by Governor Masaaki Shirakawa kept the benchmark overnight rate unchanged at 0.1% and also maintained its credit programs for lenders by a unanimous vote, the central bank said today in Tokyo.

Tokyo-based Nippon Steel Corp, Japan’s largest steelmaker, said its inventories of constructions beams fell for the first time in July after four straight months of increase.

H-beam stockpiles at Tokiwakai, a group of local distributors that sell Nippon Steel’s products, fell 2.8% to 203,400 tons at the end of July compared to 209,300 tons a month earlier, the company said in a briefing today.

Japan Airlines Corp plans to sell its ground service units in an effort to cut costs this year. It will sell JAL Ground Service Kansai Co to Konoike Transportation Co, while it’s Chubu Sky Support Co maybe purchased by Mitsubishi Corp or Marubeni Corp, according to a report in the Nikkei English News.

Gainers & Losers

Mitsubishi Materials led the gainers in the Nikkei 225 with a gain of 5.06% to ¥249 followed by Nisshinbo Holdings 3.57% to ¥928 and G.S. Yuasa Corp 2.96% to ¥556.

Denki Kagaku led the decliners in the index with a drop of 5.45% to¥382 followed by Alps Electric Co ltd 4.65% to ¥677 and NSK Ltd 3.58% to ¥566.