Nikkei Declines 1%; China, Japan Spar Escalates

Chandrasekhar Atreya
24 Sep, 2010
New York City

Stocks in Japan drop for the third day in a row on a stronger yen and a weakness in international markets. China questions four Japanese for alleged videotaping of military targets. China denies embargo on export of rare earth to Japan. Asahi Glass opened the world

[R]5:00 PM Tokyo, Japan – Stocks in Japan drop for the third day in a row on a stronger yen and a weakness in international markets. China questions four Japanese for alleged videotaping of military targets. China denies embargo on export of rare earth to Japan. Asahi Glass opened the world’s largest float glass plant in Russia.[/R]

Japanese stocks fell for the third day in a row as the yen advanced against the yen and weak trading in international markets.

The Nikkei 225 Stock Average fell 0.99% or 94.65 to close at 9,471.67. The broader Topix also fell 1% to 838.41. The yen gained traded near 84 yen to a dollar.

The benchmark stock index fell 0.47% in the week. Both Nikkei and the broader Topix had their first weekly decline this month. Of the 225 stocks in the index, 38 gained, 175 decreased and 12 were unchanged.

The Japanese government embarked Friday on a full scale examination to determine if Beijing has suspended rare earths exports to Japan.

China’s Ministry of Commerce denied the country has implemented the trade embargo. But Akihiro Ohata, Japanese Minister of Economy, Trade and Industry said, “Trading firms have received information that China has halted issuance of export quotas.”

General contractor Fujita Corp said Friday it is gathering facts on four employees currently questioned by Chinese authorities for allegedly videotaping the country’s military targets.

Fujita is seeking to win a contract to build a facility for disposing of chemical weapons abandoned by the Japanese military at the end of World War II. The four employees were in Shijiazhuang, Hebei Province, from Monday to prepare for the bid.

Sales at supermarkets in Japan fell 1.1% in August to 1.04 trillion yen from a year ago, the 21st month of decline in a row, the Japan Chain Stores Association said Wednesday.

Same-store sales at convenience stores operated by 10 major chains rose 1% in August to 676.8 billion yen from a year ago, rising for the second month in a row, the Japan Franchise Association said Wednesday.

Incubator Bank of Japan, which is under bankruptcy protection, said Friday it will resume operating an additional 60 branches at 9 a.m. Monday. This action means that all but two branches will again be operating.

Asahi Glass Co on Thursday fired up the world’s largest float glass furnace, which it had built just outside Moscow.

The plant located in Klin, some 85 kilometers northwest of Moscow, can produce 1,000 tons of glass a day boosting the daily Russian output by 60% to 2,800 tons. Most of the output will be consumed in Russia and some production bound for Central Asia and Scandinavia.

The U.S. arm of Nomura Holdings Inc won the job of joint lead manager for the $1.5 billion bond sale that the Japan Bank of International Cooperation issued Wednesday. The firm becomes the first domestic brokerage firm in more than three years to serve as a principal underwriter for dollar-denominated debt of a Japanese government entity.

Foreign Exchange margin trades have slowed since tougher leverage restrictions took effect on August 1, turnover data for that month showed. New rules implemented by the Financial Services Agency caps the leverage on forex margin trades at 50-times collateral.

The value of over-the-counter forex margin transactions tumbled 32.6% in August from a year earlier to 109.61 million yen, according to the Financial Futures Association of Japan. Trading on the Tokyo Financial Exchange’s Click 365 market slid 12.4% to 7.72 million contracts for August.

The Ministry of Agriculture and Fisheries decided Wednesday to adopt bluefin tuna catch quotas in the Sea of Japan and the East China Sea off Kyushu in the next fiscal year. The ceilings will apply to midsize and large purse-seine vessels operating in Japanese waters.

Capital spending by the overseas units of Japanese companies rose 8.2% in the quarter ended June to $4.7 billion from a year ago, the first increase in six quarters, according to data released by the Ministry of Economy, Trade and Industry.

Domestic shipments of flat-panel televisions shot up 66.7% in August to 1.71 million units from a year ago, according to data released by the Japan Electronics and Information Technology Industries Association on Wednesday.

Shipments of 29-inch and smaller TVs soared 83.6% to 551,000 units, while 30-inch to 36-inch televisions surged 82.3% to 653,000 units. Shipments of 37-inches and larger grew 37.6% to 506,000 units.

Domestic consumer electronics shipments rose 21.4% in August to 267.4 billion yen from a year ago, for the 13th month in a row, the Japan Electronics and Information Technology Industries Association on Wednesday.

The latest rise came as shipments of flat-panel TVs and other audio-visual equipment remained strong in August, up 22.1% to 202 billion yen and increasing for the 15th month in a row.

Mitsui & Co said Wednesday it will enter the contract manufacturing organization business in India. The Japanese firm concluded that demand for CMO business, in which pharmaceutical companies outsource the manufacturing to companies in India and other countries will lower the cost of drugs.

Mitsui will spend about 1.2 billion yen in October to buy 5.25% stake privately offered by India’s Arch Pharmalabs Ltd.

Gainers & Losers

Sekisui House led the gainers in the Nikkei with a rally of 2.6% to 750 yen followed by Yamaha Corp 2.22% to 967 yen, Softbank Corp 1.96% to 2,702 yen, Tokyu Land Corp 1.78% to 343 yen and Toyo Seikan 1.67% to 1,523 yen.

Denki Kagaku led the decliners in the index with a fall of 5.18% to 366 yen followed by Shinsei Bank Ltd 4.69% to 61 yen, Konica Minolta 4.57% to 793 yen, T&D Holdings Inc 4.23% to 1,788 yen and JTEKT Corp 4.09% to 773 yen.