Nikkei Slips; GDP Growth Slows to 0.1%

Chandrasekhar Atreya
16 Aug, 2010
New York City

Stocks in Tokyo trading declined after June quarter GDP expanded at 0.1%, slower pace than the previous quarter. The quarterly GDP also fell below that of China

[R]5:00 PM Tokyo, Japan – Stocks in Tokyo trading declined after June quarter GDP expanded at 0.1%, slower pace than the previous quarter. The quarterly GDP also fell below that of China’s. Toyota Corp retained its number one position in auto sales in the first half.[/R]

The Nikkei index in Tokyo slipped sharply on Monday after GDP in the quarter ending in June dropped sharply from the previous two quarters. Sony, TDK, Cannon, Pioneer and other exporters fell.

The Nikkei 225 Stock Average lost 0.61% or 56.79 points to close at 9,196.67. The broader Topix lost 0.3% to close at 828.63 with as many as two stocks declining for each that gained.

Of the 225 stocks, only 67 gained, 138 fell and 20 remained unchanged.

Economy in the quarter ending in June expanded at 0.1%, lower than previous quarter increase of 1.1%.

Real GDP rose 0.4% in annualized terms in the quarter to June, at the slowest pace in three quarters, and down from a revised 4.4% increase in January-March quarter, the Cabinet Office said Monday.

Japan’s economic output totaled $1.288 trillion in the second quarter, less than China’s $1.337 trillion, the Cabinet Office said in a statement in Tokyo today, making China the World’s second-largest economy behind the United States.

The number of new condominiums up for sale in the Tokyo metropolitan area increased 27.8% in July from a year earlier to 4,128 units, rising for the sixth straight month, Real Estate Economic Institute Co, said Monday.

Of the condos on sale, purchase contracts were signed for 78.2% or 3,229, up 2.9% from a year earlier.

Toyota Motor Corp maintained its position as the world leader in new car sales in the first half of the year for a third consecutive year, but saw its lead on second-placed General Motors Co, shrink to just over 10,000 units.

Toyota’s world-wide sales jumped 16.9% to 4.16 million units. In Japan, sales soared 40% on brisk demand for the Prius hybrid and other environmentally friendly vehicles. In the key North American market, sales increased 9.9% on larger incentives but struggled to rivals GM and Ford Motor Co, which posted 14.4% and 28.2% rise respectively.

Seiko Instruments Inc Group plans to sell as early as autumn a testing device that is capable of measuring trace cadmium content in rice in minutes.

The device was developed by the group firm SSI Nano Technology Inc, with the aim of tapping demand from agricultural cooperatives. Revised food safety regulations, which are due to take effect in February, will prohibit sale of rice containing 0.4 parts per million or more of cadmium, lifting the threshold from the current level of 1 ppm.

Japanese households spent an average 247,309 yen a month in the quarter to June, down 0.5% in real terms from a year earlier, according to data released Friday by the Ministry of Internal Affairs. The 1.7% decline in food had the biggest impact.

Japan’s Pioneer Corp plans to expand its presence in China by tapping the country’s booming energy-efficient television business.

The maker of car-navigation and audio equipment has signed an exclusive distribution deal with Suning Appliance Co to launch its liquid crystal display and light emitting diode TV’s in China for the first time, the company said yesterday.

From today customers can buy Pioneer TVs in 300 Suning outlets in more than 50 cities, including Shanghai, Beijing.

Gainers & Losers

Nippon Kayaku led the gainers in the Nikkei 225 with a gain of 3.38% to 796 yen followed by Mitsubishi Estates 2.46% to 1,251 yen and Asahi Breweries 2.43% to 1,604 yen.

CSK Holding Corp led the decliners in the index with a drop of 6.91% to 283 yen followed by Pioneer Corp 3.62% to 266 yen and Inpex Corp 3.53% to 396,000 yen.