Japan Stocks Lower on Political Worries; Tepco, Banks Down

Nigel Thomas
03 Jun, 2011
New York City

Stocks in Japan closed lower as political uncertainties dominated Tokyo trading. A series of U.S. weak economic reports and global economic slowdown also contributed to market jitters. The Bank of Japan purchased the largest amount of stock ETFs on Thursday.

[R]5:00 PM Tokyo – Stocks in Japan closed lower as political uncertainties dominated Tokyo trading. A series of U.S. weak economic reports and global economic slowdown also contributed to market jitters. The Bank of Japan purchased the largest amount of stock ETFs on Thursday.[/R]

The Nikkei 225 Stock Average dropped 0.7% to 9,492.21 and the broader Topix index fell 1.1% to 816.57.

Tokyo trading volume dropped to 1.67 billion shares from 2.07 billion yesterday and this week’s average of 1.88 billion shares.

Trading volume on the first section of the TSE was 1.1 trillion yen and nearly 80% of stocks on the first section declined.

The yen strengthened to 80.65 from 80.85 against one dollar and rose to 116.77 from 117.20 against one euro.

The Bank of Japan purchased the largest amount of ETFs on Thursday since it began buying the stock indexed funds last year. The central bank added 20.1 billion yen worth of ETFs.

Stock Movers

Export sensitive stocks traded lower after the yen strengthened.

Nikon declined 2.2% to 1,832 yen and Canon Inc eased 0.6% to 3,860 yen.

Energy related stock declined after the OPEC head ahead of the meeting signaled the organization’s willingness to increase production.

Inpex declined 3.8% to 553,000 yen and Japan Petroleum Exploration Co fell 3.7% to 3,675 yen.

Efficient light devices and bulbs makers gained after an article in the Nikkei business daily estimated rising sales as the nation struggles with power shortage.

Endo Light increased 1.8% to 1,289 yen and Iwasaki Electric Co added 1.5% to 265 yen.

Talks of new political leadership in Japan dragged the Tepco and banking stocks.

Prime minister Kan’s rival Ichiro Ozawa may win the next party and country leadership. Ozawa represents earthquake stricken northeast region of Japan.

Tepco dropped 6.2% to 286 yen and Mitsubishi Financial Group declined 1% to 2,312 yen. Mitsubishii UFJ Financial Group dropped 1.1% to 370 yen.