Weekly Decline of 1.8% in Nikkei in Tokyo Trading

Nigel Thomas
15 Apr, 2011
New York City

Stocks in Japan declined on the worries that China may tighten lending conditions and weak U.S. employment data and rising worries of sovereign debt stress in Europe. Minister of economy clarified that the government expects Tepco to pay for the costs related to nuclear power plant.

[R]5:00 PM Tokyo – Stocks in Japan declined on the worries that China may tighten lending conditions and weak U.S. employment data and rising worries of sovereign debt stress in Europe. Minister of economy clarified that the government expects Tepco to pay for the costs related to nuclear power plant and is not looking to nationalize the utility.[/R]

Stocks in Japan declined after China reported faster than expected expansion in the first quarter and inflation rose at the fastest pace in nearly three years in March.

G20 finance ministers are scheduled to meet in Washington later today as global economy struggles after two years of stimulus.

The Nikkei Stock Average decreased 62.40 or 0.6% to 9,591.52 and the broader Topix index decreased 5.43 to 0.6% to 841.29. In the week the benchmark Nikkei declined 1.8% and trading volume of 2.1 billion shares was lower than last week’s average of 2.6 billion.

The yen gained to 84.35 against the dollar.

March inflation in China rose to 5.4% after increasing at 4.9% in February and the highest pace since July 2008. The economic expansion in the first quarter was 9.7% compared to 9.8% in the last quarter of 2010.

Wholesale inflation increased at 7.3% in March, up 0.6% from February and industrial production increase 14.4% in the first quarter.

Stock Movers

Tokyo Electric Power dropped 6.2% to 469 yen after the company said it will start offering compensation to evacuees near the troubled nuclear power plant in Fukushima.

Minister of Economy, Trade and Industry Banri Kaieda said that the government has no plan to nationalize Tepco and expects the company to pay for costs related to nuclear crisis through the future profits.

Construction equipment and exporters declined after China expansion prompted worries of tighter lending. Komatsu declined 1.5% to 2,785 yen and Fanuc dropped 1.1% to 13,150 yen.

Real estate developers declined after broker Nomura Securities in a research report offered a grim outlook for residential and condo units market in the northeast Japan after the March 11 earthquake.

Mitsui Fudosan dropped 1.7% to 1,354 yen and Sumitomo Realty & Development declined 3% to 1,572 yen.

Aeon increased 2.1% to 945 yen after the department store operator estimated 33% decline in earnings in the current fiscal year.

Toyota declined 09% to 3,240 yen and Honda Motor and Nissan Motor edged lower too.