Japan Stocks Flat on Stronger Yen; Export Decline Slows in June

Nigel Thomas
21 Jul, 2011
New York City

Stocks in Japan edged higher on a regional rally and after it posted a surprise trade surplus in June. The exports decline slowed to 1.6% fall in the month but imports rose to 9.8%. Japan still logged the third largest trade deficit in the first half since record keeping began in 1979.

[R]4:30 PM Tokyo – Stocks in Japan edged higher on a regional rally and after it posted a surprise trade surplus in June. The exports decline slowed to 1.6% fall in the month but imports rose to 9.8%. Japan still logged the third largest trade deficit in the first half since record keeping began in 1979.[/R]

Stocks in Tokyo opened higher on the improving sentiment in the global markets and a regional trading strength.

However, indexes turned lower after a private survey in China indicated manufacturing shrank for the first time in twenty eight months and the yen gained after Japanese trade surplus in June was 70.7 billion yen.

The Nikkei 225 Stock Average increased 0.04% or 4.49 to 10,010.39 and the broader Topix index fell 0.1% to 860.11.

The yen edged higher to 78.61 from 79.07 as trade surplus in June surprised economists and traders.

Japan Trade Surplus in June, 3rd Largest Deficit in Six Months

Trade surplus in June shrank 89.5% from a year ago to 70.7 billion. Exports declined 1.6% to 5,775.9 billion and imports soared 9.8% to 5,705.20 billion yen according to the Finance Ministry.

Exports rose for the fourth month in a row and imports gained for the eighteenth month in a row.

For the six months to June trade deficit was 895.5 billion yen, the third largest since record keeping began in 1979.

Exports to China increased 1.2% to 1,114.30 billion yen and to the U.S. rose 6.1% to 859.4 billion and to the European Union soared 8% to 660 billion yen.

Stock Movers

Fast Retailing increased 2.9% to 13,720 yen after positive comments from Nomura Securities and revised higher its price target to 15,500 yen.

The company is expected to benefit from improved apparel sales after the government started its campaign o lower power consumption by 15%.

PC parts and electronics assemblies makers traded mixed after Intel earnings prompted weaker outlook for the industry sales.

TDK, a maker of hard disk drive heads, declined 2.2% to 4,280 yen and a maker of hard disk drives motors, Nidec decreased 1.8% to 7,720 yen.

Tokyo Electron gained 0.6% to 4,275 yen and Shinko Electric Industries edged lower 0.1% to 704 yen.

Tokyo Electric Power soared 16% to 590 yen on short covering rally.

Mitsuba Corp plunged 7.5% to 736 yen and Calsonic Kansei decreased 2.2% to 498 yen after Reuters reported that Japan Fair Trade Commission is investigating seven auto parts makers for a price-fixing cartel.

Banks traded higher after financials rallied on the prospect of an agreement to bailout Greece later today in Brussels.

Mitsubishi UFJ Financial Group added 1.2% to 395 yen and Sumitomo Mitsui Financial Group added 0.5% to 2,442 yen.

Itoham Foods declined 2.5% to 311 yen after Kyodo news agency report noted that more than 1,000 beef cattle fed with radioactive cesium contaminated feed were shipped across Japan from Fukushima region.

Kazutoshi Nobuto, a spokesman for the agriculture ministry said today number of cattle fed with contaminated feed rose to 1,256 yen.

NOK Corp soared 11% to 1,495 yen after it estimated full year earnings outlook of 22.1 billion yen. The company offered its outlook a month later on the account of the March 11 earthquake.