Nikkei Drops 0.9%; Steel Production Estimated Flat

Chandrasekhar Atreya
20 Dec, 2010
New York City

Tokyo stocks dropped the most in a month on a stronger yen against the euro damping outlook for exporters. Rising tensions in the Korean peninsula contributed to the market jitters. Crude steel production is expected to stay flat in 2011.

[R]5:00 PM Tokyo, Japan – Tokyo stocks dropped the most in a month on a stronger yen against the euro damping outlook for exporters. Rising tensions in the Korean peninsula contributed to the market jitters. Crude steel production is expected to stay flat in 2011.[/R]

Tokyo stocks dropped the most in this month led by exporters after the euro weakened to a two-week low against the yen.

Stocks were down sharply earlier in the day after South Korea conducted live military exercise but recovered after a lack of response from North Korea. Earlier North Korea had said it will respond.

The Nikkei 225 Stock Average dropped 0.85% or 87.42 to close at 10,216.41. The broader Topix also dropped 0.51% or 4.59 to close at 898.55, with all but three groups tracked by the index dropping.

The euro depreciated to as low as 110.18 against the yen today, its weakest level since December 7. The Japanese currency closed at 83.88 yen to a dollar in Tokyo today.

Japan’s revised composite index of coincident economic indicators fell by 1.3 points from September to 100.8 in October, slightly better than the preliminary reading of a 1.4 point drop released on December 7, the Cabinet Office said today.

The Cabinet Office maintained its assessment that the economy is at a standstill.

The number of people in Japan who want the country to have friendly relationship with China declined to a record low of 20% according to a poll conducted by the government, down 18.5% from the previous survey done last year, the Cabinet Office said on Saturday.

Honda Motor Co said Friday it aims to sell 12% more cars in China in 2011, or about 730,000 vehicles, as the carmaker unveiled plans for its Chinese market for the year 2011.

Questions about overcharged interest surged to an all time high of 470 in November, up 340% from a month ago, the Japan Financial Services Association said on Friday.

The association said the surge was due to the collapse of consumer lender Takefuji Corp. After the consumer lender sought a creditor protection under the Corporate Rehabilitation Law in the month of September, requests for advice shot up as Takefuji customers scramble for refunds.

Minebea Co said today it plans to spend nearly 5 billion yen to construct a new motor plant in Cambodia. The precision component maker is aiming to strengthen its production network in Southeast Asia with this plant. This new plant will receive parts from its Thai plant and manufacture small and midsized motors for home electronics and other uses.

Mazda Motor Corp plans to introduce its eight-passenger MPV minivan in China in an effort to expand its sales there.

The units sold in China will be based on Japanese specifications with some modifications such as moving the steering wheel to the left side. Production has been outsourced to its partner FAW Group Corp.

Crude steel production in 2011 will likely be the same as forecast this year at 110 million tons, the Japan Iron and Steel Federation said today.

At a press conference today in Tokyo, the Chairman of the federation, Eiji Hayashida, said the federation expects the country to export some 40 million tons of steel despite the rising yen. He also added that steel production must closely track demand due to higher inventories on hand.

Stock Movers

Nippon Sheet Glass dropped 1.83% to 214 yen. Fanuc Ltd, the maker of industrial robots lost 1.78% to 12,150 yen. Sony Corp fell 1.2%.

Uny Co, a retailer, dropped the most in the Nikkei index after Macquarie Group Ltd cut its recommendation of the stock. Uny dropped 4.2% to 778 yen.

Canon Electronics climbed 3.4% to 2,317 yen after raising it net income forecast for the year 2010 by 12%.

Gree Inc gained 2.29% to 1,123 yen after saying 171 companies will provide social applications for its platform for smartphones.

H.I.S Co, the largest listed travel agency of Japan, gained 6.59% to 1,947 yen after forecasting a 54% jump in the full year profits to 5.2 billion yen.