Utilities Lift Nikkei in Tokyo; Trade Deficit Surges

Nigel Thomas
20 Jun, 2011
New York City

Stocks in Japan declined in the early trading but recovered the losses in the afternoon after utilities closed higher. Japan government said nuclear plants can resume operation as scheduled after the successful testing. Mazda and Olympus rose on the higher earnings estimates.

[R]5:10 PM Tokyo – Stocks in Japan declined in the early trading but recovered the losses in the afternoon after utilities closed higher. Japan government said nuclear plants can resume operation as scheduled. Mazda and Olympus rose on the higher earnings estimates.[/R]

Stocks in Japan and Asia declined on the on-going worries related to Greece. Investors turned positive after Trade Minister Banri Kaieda said nuclear plants passed safety checks and reactors are expected to restart on schedule.

The Nikkei 225 Stock Average rose 3 to 9,354.32 and the broader Topix index increased 0.2% to 806.83.

Tokyo trading volume increased to 1.94 billion shares from the 1.79 billion in the previous session. Of the stocks traded, 1,252 increased and 289 decreased.

The yen gained to 80.25 from 80.08 against one dollar and rose to 114.0 from 114.05 against one euro.

Trade Deficit Surges to Second Worst in May

Japan saw a merchandise trade deficit of 853.7 billion yen in May, following the revised 464.8 billion yen deficit in April, the Ministry of Finance said today, following the devastating earthquake and tsunami on March 11.

The monthly trade deficit was the second worst after the 967.9 billion yen deficit in January 2009.

Exports fell 10.3% from a year ago to 4,760.80 billion yen, third monthly decline in a row and imports rose 12.3% to 5,614.50 billion yen on higher commodities prices.

The deficit was largely driven by the 39% fall in exports of vehicles to the U.S., Europe and Middle East and 18.5% fall in electronics and exports parts exports to Asia.

Stock Movers

Chubu Electric Power Co soared 8% after the government said nuclear power plants passed safety checks.

Tokyo Electric Power increased 7.3% and Tohoku Electric Power soared more than 9%.

Olympus Corp increased 4.3% to 2,787 yen after the company estimated net profit to surge 140% to 18 billion yen from 7.4 billion in the previous year.

Resource linked stocks closed lower after crude oil and metals prices closed lower. Copper decreased 1.1% and gold and silver edged lower.

Mitsubishi Corp declined 0.8% to 1,915 yen and Mitsui & Company fell 0.8% to 1,277 yen.

Inpex Corp dropped 1.6% to 555,000 yen after crude oil prices declined 1.7% to $91.42 a barrel in New York.

Panasonic Corporation, the consumer electronics maker said it estimates net income of 30 billion yen or 12.97 yen per share for fiscal year ending March 31, 2012. Also, net sales for the full year are estimated to be 8.70 trillion yen.

Mazda increased 2.1% to 199 yen after the automaker estimated net income of 1 billion yen in the current fiscal year compared to a loss of 60 billion yen a year ago. The company also plans to build a plant in Mexico with an annual capacity of 140,000 units.