Nikkei in Japan Falls 1.8%, Foreign Minister Resigns

Nigel Thomas
07 Mar, 2011
New York City

Stocks in Tokyo trading fell after crude oil prices gained, Toyota debt rating was lowered and Japanese foreign minister resigned. Automakers declined in the worries that global demand will decline as crude oil price jump 50% in the last eight months to a 30-month high.

[R]5:00 PM Tokyo – Stocks in Tokyo trading fell after crude oil prices gained, Toyota debt rating was lowered and Japanese foreign minister resigned. Automakers declined in the worries that global demand will decline as crude oil price jump 50% in the last eight months to a 30-month high.[/R]

Stocks in Japan declined as the oil prices rise and tension in the Middle East remain high. Markets were also jittery after Foreign Minister Seiji Maehara resigned over political donation from a foreign resident in violation of campaign financing law.

Crude oil price is up 50% in the last eight months and investors are factoring elevated prices at least till the end of June. Standoff between Libyan army and rebels has deepened and begun to affect retail petrol prices in Europe.

Retail petro price this weekend in Italy and the Netherlands shot up to 1.67 euros a liter petrol prices.

Nikkei 225 Stock Average declined 1.8% or 188.64 to 10,505.02 and the broader Topix index fell 1.5% to 941.63.

Trading volume on the main board was 2.2 billion shares and 1,376 shares declined and 216 increased.

Crude oil futures price for the immediate month delivery increased to 30-month high to $106 a barrel in Asian trading.

Stock Movers

Inpex Corp gained 1.6% to 588,000 yen tracking the increase in crude oil prices. The stock is now up 23% in the year so far.

THK declined 4.1% to 2,137 yen on negative comments from a broker and on the worries that a slowdown in capital spending may affect operating margin at the company.

Oki Electric Industry jumped 14% to 83 yen after the company said 1,018 employees accepted early retirement offer.

Toyota Motor Corp declined 2.4% to 3,695 yen after the rating agency Standard & Poor’s lowered the company’s debt and cited slower profitability recovery.

Other automakers declined on the worries that higher oil prices will dampen the global demand. Nissan Motor declined 2.6% to 829 yen and Honda Motor fell 3.1% to 3,435 yen.
Exporters declined. Canon fell 2.4% to 3,840 yen and Sony dropped 1.7% to 2,926 yen.

Megmilk Snow Brand increased 2.3% to 1,505 yen and Morinaga Milk Industry increased 1.8% to 348 yen after China based beverage maker Hangzhou Wahaha Group’s chairman said it is considering to acquire Japan based dairy product maker.

Both companies denied that they have approached Chinese company or are in discussions to sell.