Nikkei in Tokyo Drops 0.7%; Elpida Plunges 13%

Nigel Thomas
11 Jul, 2011
New York City

The Nikkei index declined after rallying for two weeks and the yen strengthened. Industrials and automakers declined after the U.S. reported sharply lower than expected increase in payrolls. Banks fell after debt contagion fears spread in the euro-zone to Italy.

[R]4:00 PM Tokyo – The Nikkei index declined after rallying for two weeks and the yen strengthened. Industrials and automakers declined after the U.S. reported sharply lower than expected increase in payrolls. Banks fell after debt contagion fears spread in the euro-zone to Italy.[/R]

Stocks in Japan retreated on global worries and weaker than expected jobs report in the U.S. Banks, industrials and automakers were among the leading decliners.

The meager increase in payrolls of 18,000 was sharply lower than 150,000 anticipated by economists. Market jitters were also compounded after debt fears in the euro-zone spread to Italy and Chinese consumer price inflation increased at the fastest pace in 3-years to 6.4%.

The Nikkei 225 Stock Average fell 0.7% to 10,069.53 and the index declined after rallying in seven of the last eight sessions.

The broader Topix index fell 0.5% to 870.16 and turned lower for the first time after rallying more than 4% in the last eight days.

Tokyo Stock Exchange first section trading volume decreased to 1.5 billion shares from 1.78 billion shares on Friday. Trading declined to 1.01 trillion yen from 1.45 trillion yen average for the year.

The yen rose to 80.51 from 81.20 against one dollar and gained to 114.40 from 116.95 against one euro.

Stock Movers

Automakers, industrials and export sensitive stocks closed lower.

Toyota Motor decreased 0.7% to 3,420 yen and Honda Motor decreased 0.3% to 3,250 yen.

Canon Inc fell 1.4% to 3,865 yen and Elpida dropped 13% to 787 yen.

Mitsubishi UFJ Financial Group declined 1.5% to 409 yen and Sumitomo Mitsui Financial Group fell 1.9% to 2,520 yen.

Elpida Memory earlier filed with the Japan’s ministry of finance to raise as much as 52.2 billion yen in a stock sale and 27.5 billion yen through the sale of convertible bonds.

K’s Holdings Corp increased 4.6% to 3,885 yen on a broker speculation and a revise in price target.

Seiko Epson Corp decreased 2.5% to 1,352 yen after the watch and printer maker is estimated to have operating profit to decline 60% to 4 billion yen in the quarter ending in June according to a report in the Nikkei newspaper.

Tokyo Electron Ltd fell 2.9% to 4,435 yen after the company said semiconductor equipment tools orders declined 34% from the previous quarter to 120 billion yen in the quarter to June.

Tokyo Electric Power Co. increased 7% to 441 yen on the media speculation that the government has deferred its plan to sell the company’s transmission assets to calm financial markets and keep the utility company viable.

Ryohin Keikaku soared 6.9% to 4,185 yen after the operator of Muji stores lifted its current year earnings outlook.

Fast Retailing increased 2% to 13,550 yen on the expectations that the power cut will spur demand for lighter apparel.