Stocks in Japan Erase 2-Day Gains

Chandrasekhar Atreya
20 Aug, 2010
New York City

The benchmark index in Japan erased two days of gains after the yen resurged on the rise in weekly jobless claims. Panasonic shifts some more manufacturing to China to boost output. Crude steel output increases 20%, ninth straight monthly increase in July.

[R]5:00 PM Tokyo, Japan – The benchmark index in Japan erased two days of gains after the yen resurged on the rise in weekly jobless claims. Panasonic shifts some more manufacturing to China to boost output. Crude steel output increases 20%, ninth straight monthly increase in July.[/R]

Japanese stocks erased two-days of gains after a rise in weekly jobless claims lifted the yen against the dollar. The Nikkei 225 Stock Average declined for the second week in a row.

The Nikkei 225 Stock Average fell 1.96% or 183.3 points to close at 9,179.38 in Tokyo. The broader Topix lost 1.7% to 829.59 with as many as 10 stocks falling for each that gained.

All the 33 groups followed in the Topix dropped. For the week the Nikkei retreated 0.8% while the Topix fell 0.2%. Of the 225 stocks in the Nikkei, only 4 gained, 4 were unchanged and 217 declined.

Prime Minister Naoto Kan on Friday told members of the cabinet to consider tax reforms and other measures to address the yen’s rise and the economic slowdown. After the meeting in the morning Kan met the Economic and Fiscal Policy Minister Satoshi Arai, who submitted a draft stimulus package to measures to create domestic demand and jobs.

Nomura Securities on Friday revised its outlook for Japan’s economic growth for the next fiscal with the yen’s continuing rise against the dollar. The Japanese currency’s strength prompted the brokerage to cut its foreign exchange predictions.

For fiscal 2010-11 through to March 2011, Nomura cut its forecast for real GDP growth to 1.9% year-on-year expansion.

Panasonic Corp said it will boost its output of plasma display panels for use in flat TVs in China by about five fold in an effort to adjust to the yen’s strength and better cope with robust demand in China.

By transferring some of its production facilities from Amagasaki, Western Japan to Shanghai the company will boost output to 120,000 units per month from its present 25,000 units.

Japan’s crude steel production increased in July by 20.4% to 9.22 million tons from a year earlier, marking it the ninth straight month of expansion, the Japan Iron and Steel Federation said Friday.

As the country sweltered in July heat, residential power usage soared to a new record. Homes used 22.58 billion kilowatt-hours of electricity, 6.1% more than a year earlier and the highest for July since comparable data first collected in 1972, the Federation of Electric Power Companies said Thursday.

Since the 1980s, Indonesia was the biggest source of Japan’s LNG supply, but in the first six months of 2010, it was overtaken by Malaysia and then Australia, which is on track to become a key player in this industry.

Gainers & Losers

Trend Micro Inc led gainers in the Nikkei with a gain of 4.49% to 2,281 yen followed by Softbank Corp 2.34% to 2,536 yen and Fuji Electric 0.45% to 222 yen.

Nippon Sheet Glass led decliners in the index with a fall of 6.45% to 203 yen followed by Sumitomo Osaka 5.81% to 146 yen and Mitsubishi Electric 5.36% to 706 yen.