Nikkei Gains, October Export Growth Slows

Chandrasekhar Atreya
25 Nov, 2010
New York City

Tokyo indexes closed up a fraction as nervous traders monitor elevated tensions in the Korean peninsula. Exports in October rose at a slower pace of 8% and rose for the eleventh month in a row. Tourist arrivals in October drop as fewer Chinese visit Japan.

[R]5:00 PM Tokyo, Japan – Tokyo indexes closed up a fraction as nervous traders monitor elevated tensions in the Korean peninsula. Exports in October rose at a slower pace of 8% and rose for the eleventh month in a row. Tourist arrivals in October drop as fewer Chinese visit Japan.[/R]

Stocks in Tokyo edged a fraction higher as the tension in the region cool down after North and South Korea exchanged fires. Japan, South Korea and the U.S. stepped up their diplomatic rhetoric. Markets in Japan and Asia at least for now have resumed their normal operations.

The Nikkei 225 Stock Average added 0.5% or 49.65 points to close at 10,079.76. The broader Topix also gained 0.4% to close at 869.81.

Japan, the U.S. and South Korea are accelerating their efforts to contain North Korea following that country’s shelling of a South Korean island on Tuesday.

Foreign Minister Seiji Maehara and U.S. Secretary of State Hilary Clinton spoke this morning and agreed to support South Korea in their efforts to counter the moves of its northern neighbor. Two nations are considering approaching the U.N. Security Council with the cooperation of China, which wields a very strong influence over North Korea.

Exports from Japan continued to slow in October as demand from Europe faltered.

Shipments in October rose 7.8% from a year earlier to 5.724 trillion yen, data from the Ministry of Finance showed today. September exports rose 14.3% and exports increased for eleven months in a row.

Corporate services price index for October in Japan fell to a record low of 96.6, down 1.2% from a year ago, after it fell 1.1% in September, according to figures from Bank of Japan, released today.

Toyota Motor Co remains on a crisis footing even a year after the first batch of a wave of recalls started. Toyota has recalled more than 12 million units in the period.

“I don’t think the crisis is over. If we step down the level of our efforts at this point in time, it may mean we are sowing the seeds of crisis once again,” said Shinichi Sasaki, the board member responsible for quality while talking to the Financial Times.

Restaurant sales in Japan rose 2.7% in October from a year ago, for the fourth consecutive month of gain, the Japan Foodservice Association said today.

The number of customers rose 4.4% though there was a drop of 1.7% in sales per customer as consumers preferred low priced offerings at Japanese style pubs and some beef-bowl restaurants.

Export of goods by air from Japan fell 1.6% in October from a year ago to 92,050 tons, for the first drop in a year, on a slowdown in electronic parts shipment to Asia, according to the Japan Aircargo Forwarders Association.

Shipments of LCD components and semi-conductor manufacturing equipment to China and Taiwan, which were robust in the first half, dropped in the second half.

Tourist arrivals in October saw a significant drop from September as arrivals from China dropped. The number of tourist arrivals in October was 727,600 and 7.33 million arrivals in the year, according to The Japan National Tourism Organization report released on Wednesday.

Japan targeted 10 million tourists in the year.

Stock Movers

The weaker yen helped exporters gain in trade today. Toyota Motor Corp advanced 1.07%, to its highest level since June 16, at 3,305 yen. Honda Motor Co added 0.65% to close at 3,085 yen.

Sony Corp added 0.8% to close at 2,894 yen after being upgraded to “outperform” from “neutral” by Mizuho Securities.

Commodity prices of crude oil and metals advanced.

Mitsubishi Corp rose 0.61% to 2,128 yen and Mitsui & Co, which relies on commodities for its largest source of profit, gained 0.38% to 1,335 yen.

Sumitomo Electric Industries, which makes electric wires, gained 2.04% to 1,102 yen after the prices of six industrial metals on The London Metal Stock Exchange Index increased by 1.4% after three consecutive days of decline.

Mitsui O.S.K Lines Ltd gained 1.43% to close at 567 yen after it was awarded a long-term iron ore shipping contract by Vale SA.