Japan Department Stores Sales Decline Again; Stocks Flat

Chandrasekhar Atreya
18 Oct, 2010
New York City

Stocks in Japan closed nearly unchanged and the yen traded at elevated level. Department store sales fell in September for the 31st month in a row. Japanese oil firm Inpex drops its Iran project in order to pursue energy development plans in Australia and other regions.

[R]5:00 PM Tokyo, Japan – Stocks in Japan closed nearly unchanged and the yen traded at elevated level. Department store sales fell in September for the 31st month in a row. Japanese oil firm Inpex drops its Iran project in order to pursue energy development plans in Australia and other regions.[/R]

Japanese stocks rebounded Monday morning buoyed by the rise in technology-focused Nasdaq Composite Index near a five-month high on Friday, as well as expectations that U.S. Fed will announce a plan to purchase additional Treasury bonds.

The stocks fell towards the end pulled by the stronger yen and the benchmark index little changed.

The Nikkei 225 Stock Average Index lost 0.02% or 1.76 points to close at 9,498.49. The broader Topix however rose 0.5% to close at 830.52.

Of the 225 stocks in the Nikkei index, 118 gained, 90 decreased and 17 were unchanged.

Department store sales fell in September, for the 31st month in a row, sliding 5.2% from a year ago to 446.3 billion yen, the Japan Department Stores Association said Monday.

The yen closed at 81.14 yen to a dollar and 112.73 yen to a euro at close on Monday.

Sales at department stores in Tokyo area fell 3.8% to 112.7 billion yen in September, also marking a drop for the 31st month in a row.

Asahi Kasei Corp said Monday it will spend about 15 billion yen to build a new synthetic rubber plant to make fuel-efficient automotive tires in Singapore.

The company plans to begin operating lines in June 2013 that will process 50,000 tons of rubber annually, enough to make about 20 million tires.

Tokyo’s Haneda Airport marked next Thursday’s opening of its new international terminal building and an additional runway with a ceremony on Saturday amid expectations that the expansion of the airport will help Japan’s struggling economy.

Inpex Corp sacrificed its Azadegan oil development project in Iran in order to pursue energy development in Australia and elsewhere.

“In view of the global political landscape, we have reached this conclusion after consulting with the Japanese government,” said Executive Officer Kazuhiko Itano, regarding the company’s decision taken on Friday last to withdraw from the project.

Publicly traded restaurant operators saw their combined pretax profits slide for the first time in a year for the three months ended August 31, suggesting that their price-cutting race has begun to take its toll.

Overall, sales for the 15 firms were relatively flat, dipping just 0.2% on the year to 215 billion yen. But, their aggregate pretax profits fell 3.8% to 12.2 billion yen on lower sales per customer.

Sumitomo Heavy Industries Ltd said Friday that it entered exclusive talks with Hansen Transmissions International NV to acquire the Belgian firm’s industrial gearbox subsidiary. Sumitomo Heavy plans to buy Hansen Industrial Transmissions NV next March for 75 million euros, or about 8.6 billion yen, from Hansen Transmissions, which owns the subsidiary.

The exclusive negotiation period lasts until March, and Sumitomo Heavy is looking to conclude the purchase agreement in January.

Sumitomo Mitsui Financial Group Inc and Sumitomo Mitsui Banking Corp opened a new headquarters and main outlet building in Tokyo’s Otemachi business district Monday, with an aim to enhance efficiency by consolidating the bank’s main functions in a single location.

Sumitomo Mitsui Banking was established via a merger of Sakura Bank and Sumitomo Bank in 2001.

Mizuho Global Alternative Investments Ltd, a wholly-owned unit of Mizuho Corporate Bank Ltd, began on October 5 to provide alternative investment products such as hedge funds to Japan’s corporate pensions and institutional investors, aims to raise 100 billion yen in three years starting this month.

The company is trying to tap growing demand from the nation’s more than 60 trillion yen corporate pension market, whose funds are seeking to diversify investments away from traditional asset classes such as bonds and equities after years of underperforming stocks and low government bond yields.

Gainers & Losers

Oki Electric Industries led gainers in the Nikkei with a rally of 5.08% to 62 yen followed by Sapporo Holdings 4.43% to 330 yen, All Nippon Airways 4.12% to 303 yen, NEC Corp 3.95% to 237 yen, Chubu Electric Power 3.51% to 1,977 yen and NGK Insulators 3.54% to 1,582 yen.

Taiheiyo Cement Co led decliners in the index with a drop of 4.95% to 96 yen followed by Showa Denko K. K 3.92% to 147 yen, Meidensha Corp 3.4% to 313 yen, CSK Corp 3.12% to 279 yen, Toho Zinc Co Ltd 2.72% to 357 yen and Resona Holdings 2.67% to 656 yen.