Nikkei Drops 1.7%, Two Strong Quakes Hit Japan

Nigel Thomas
12 Apr, 2011
New York City

Stocks in Tokyo dropped for the second day after one earthquake hit Fukushima region and another powerful quake stuck in the ocean near Tokyo. The Nikkei dropped 1.7%. Crude oil eased. Tokyo Steel estimated higher annual net loss.

[R]4:40 PM Tokyo – Stocks in Tokyo dropped for the second day after one earthquake hit Fukushima region and another powerful quake stuck in the ocean near Tokyo. The Nikkei dropped 1.7%. Crude oil eased. Tokyo Steel estimated higher annual net loss.[/R]

Stocks in Tokyo accelerated the decline for the second day after Japan suffered two quakes in the afternoon. The persistent aftershocks since the March 11 triple disaster have now reached more than 920 and seismologists are estimating as many as 4,000 aftershocks in the next one year.

Japan’s safety agency lifted its risk rating at Fukushima to the highest level on the international scale to 7 from 5 at the troubled Fukushima Daiichi nuclear power plant.

The Japan Meteorological Agency said first quake struck Fukushima area with a magnitude of 4 and the second quake of a magnitude of 6.3 struck in the ocean east of Tokyo, swinging buildings in downtown Tokyo and closing Narita airport runways.

Crude oil declined after the International Monetary Fund lowered global economic outlook and cut down the prospect of speedy recovery in Japan.

The IMF lowered global economic growth outlook in the current year to 4.4% and lowered the U.S. economic growth forecast to 2.8% from 3% and for Japan to 1.4% form 1.6%.

The Nikkei 225 Stock Average dropped 1.7% to or 164.44 to 9.555.26 and the broader Topix index fell 1.6% to 838.51. Trading volume on the main board eased to 2.23 billion shares compared to average 2.6 billion shares traded last week.

U.S. crude oil futures declined $2.05 to $107.87 a barrel.

Stock Movers

Toyota Motor declined 0.6% to 3,240 yen, Honda Motor fell 1.4% or 41 yen to 2,862 and Nissan Motor eased 0.2% to 696 yen.

Sony Corp dropped 2.9% to 2,502 yen and Canon fell 1% or 40 yen to 3,560 yen. Nikon dropped 3.3% to 1,610 yen.

Tokyo Electric Power Company dropped 10% to 450 yen on 235 million shares volume. The electric utility shares had earlier surged to 539 yen after the Vice Trade Minister Tadahiro Matsushita said to the finance committee in the upper house committee that the company nationalization is not considered.

Inpex Corp declined 5.2% to 620,000 yen and Japex declined 3.5% to 4,010 yen.

Tokyo Steel Manufacturing fell 0.6% to 919 yen after the company estimated net loss in the fiscal year ended in March of 10.5 billion yen from the current estimate of 8 billion yen.