Nikkei Slips; Talks of Additional Stimulus

Chandrasekhar Atreya
17 Aug, 2010
New York City

Stocks in Japan fell further dropping below the lows of July 1. Prime Minister contemplates additional stimulus. Kawasaki Kisen orders seven new midsize cargo vessels. The government plans to build new jumbo nuclear reactors and also look for exports sales.

[R]5:00 PM Tokyo, Japan – Stocks in Japan fell further dropping below the lows of July 1. Prime Minister contemplates additional stimulus. Kawasaki Kisen orders seven new midsize cargo vessels. The government plans to build new jumbo nuclear reactors and also look for exports sales.][/R]

Tokyo stocks continued their slide on Tuesday with the Nikkei 225 Stock Average falling 0.38% or 34.99 points from Monday to end the day at 9,161.68, a new low for the year and below its previous July 1 low of 9,191.60.

The broader Topix fell 0.2% to close at 826.78 with about four shares declining for every three rising.

Of the 225 stocks in the Nikkei Average 131 declined, 76 gained and 18 were unchanged.

Prime Minister Naoto Kan and Bank of Japan Governor Masaaki Shirakawa are making preparations to meet next week in what would be their first talks since June 21. They have already agreed to meet quarterly and this meet could possible move that schedule up slightly.

Prime Minister Naoto Kan said Monday that the government may offer another round of stimulus measures in a bid to underpin the economy.

On Monday, the premier asked the Minister of Economy and Fiscal Policy Satoshi Arai, Minister of Finance Yoshihiko Noda and Minister of Economy, Trade and Industry Masayuki Naoshima to examine the current economic conditions and report back with specific proposals.

Japan’s preliminary real gross domestic product showed a tepid 0.4% growth for the April-June quarter, while a strong yen and weak stocks threaten to derail the economic turnaround. “We need to closely monitor developments, along with currency conditions,” said Kan while speaking to reporters at his official residence.

Kawasaki Kisen Kaisha Ltd resumed placing orders for midsize cargo vessels after a two-year hiatus. The company recently ordered four vessels with a load capacity of 105,000 tons from Oshima Shipbuilding Co and three vessels with a load capacity of 88,000 tons from Imabari Shipbuilding Co. The total price is estimated to be between 30 billion yen and 35 billion yen. The ships will be completed between 2013 and 2014.

Kawasaki Plans to secure 20 more midsize carriers, including those leased from other companies.

Suntory Holdings Ltd was the only company from the top four brewers to post a rise in group net profit for the first half ended June 30. Net profit soared 65% from a year earlier to 13.4 billion yen at Suntory Whiskey with a sales growth of 26% thanks to the popularity of highball cocktails.

Toray Industries Inc said Monday it has reorganized its plastics business in China, establishing a supervisory company that draws up strategies. The move is in response to growing demand for plastics used in electronic components and auto part functional areas such as connectors.

Wholly-owned by Toray Group, Toray Plastics (China) Co oversees the operations of a resin compound manufacturing subsidiary in the Guangdong Province city of Shenzhen and a unit in Suzhou, Jiangsu Province that makes and sells the compounds.

Tsingtao Brewery Co plans to acquire an equity stake in Asahi Breweries Ltd’s subsidiary Hangzhou Xihu Beer Asahi Co, The Economic Observer reported on Monday.

Asahi Breweries owns 55% of Xihu Beer through a Hong Kong subsidiary, with the remaining 45% being owned by Hangzhou Industrial Assets Management Co, which is run by the government of Hangzhou in Zhejiang Province. Tsingtao is expected to buy the latter firm’s stake for nearly 2 billion yuan or about 25 billion yen.

Toshiba Corp and Mitsubishi Heavy Industries Ltd are among many companies working with the government on a $645 million project to develop jumbo-sized reactors by 2030 to replace the older models in the country and also sell them abroad.

The new reactors will have a 80-year life span compared to the life of 60-year for the current models and take less than 30 months to build according to the draft assessment report submitted to a nuclear power committee in Tokyo today.

Sumitomo Corp, Japan’s third-largest trading house, said it resumed output at its zinc and lead mine in Bolivia after protestors suspended road blockades at the site. The wholly-owned mine at San Cristobal was closed for maintenance on August 10 and 11, and was closed further since August 12 following the blockade.