Nikkei in Tokyo Drops 1.6%; Shippers, Banks Decline

Nigel Thomas
20 Sep, 2011
New York City

Stocks in Japan declined and the benchmark index dropped 1.6%. Shipping companies fell after the freight rate measure declined 3%. Banks were among the leading decliners. Nissan Motor plans to source more parts from China and Korea.

[R]6:00 PM Tokyo – Stocks in Japan declined and the benchmark index dropped 1.6%. Shipping companies fell after the freight rate measure declined 3%. Banks were among the leading decliners. Nissan Motor plans to source more parts from China and Korea.[/R]

Stocks in Japan declined sharply after a 3-day weekend on the growing worries of exports to the euro zone. Japanese investors got the first chance to react to the European finance ministers’ decision to delay the release of bailout funds to Greece.

Greek talks continued to drag on and the international lenders postponed their decision to release the sixth tranche of 8 billion euros to October, just ahead of mid-October when Greece is expected to run out of funds.

In addition, Italian government debt rating was lowered by the rating agency S&P. The surprise move was not expected at least till a rating review completed by Moody’s, another rating agency.

The Nikkei 225 Stock Average fell 1.6% to 8,721.24 and the broader Topix index declined 1.7% to 755.04.

The yen edged lower to 76.41 from 76.63 against one dollar and the euro rose from the 10-year low to 104.15 after trading at 104.82 yesterday.

Trading volume on the First Section on the Tokyo Stock Exchange decreased to 1.52 billion shares, lower than 1.75 billion shares average last week. Declining issues outnumbered the rising by 1,398 to 188.

Stock Movers

Mitsubishi Heavy Industries declined 3.7% after the largest domestic defense contractor confirmed that hackers accessed its computers and may have stolen vital information.

Japan Tobacco Inc increased 5.4% to 368,000 on the speculation that the government may lower its stake in the company from its 50% holding.

Tokyo Electron dropped 8.1% to 308 yen after the company dropped its plan to increase utility rates 15% after a stiff resistance from customers and Japanese government.

Dai-ichi Life dropped 6.3% after the insurer said it held in June 330 billion yen or $4.2 billion of Italian and Spanish bonds.

Shipping companies declined after the freight rate index fell 2.8% on Monday.

Nippon Yusen KK dropped 6% to 219 yen and Mitusi OSK Lines Ltd declined 6.2% to 320 yen.

Mitsubishi UFJ Financial Group fell 3% to 335 yen and Sumitomo Mitsui Financial Group decreased 2.8% to 2,121 yen.

Tokyo Electric Power declined 5.9% to 335 yen after the head of Japanese Bankers Association repeated his earlier statement that banks will not forgive loans to the troubled utility even if asked by the government.

Takara Holdings Inc decreased 0.9% to 441 yen after the maker of spirits lowered its net income outlook by 22% to 700 million yen.

Cresco Ltd increased 1.8% to 520 yen after it lifted its net income outlook by 26% to 240 million yen.

Toyota Motor decreased 49 yen to 2,685 yen and Honda Motor Co. fell 76 yen to 2,372 yen and Nissan Motor decreased 24 yen to 665 yen.

Nissan plans to source more parts from Japan and South Korea as stronger yen makes the imports cheaper than the domestic production.

Suzuki Motor increased 49 yen to 1,659 yen on the speculation that Germany based Volkswagen AG may bid for the company.

Sony Corp rose 4% to 1,514 yen, Panasonic Corp fell 16 yen to 753 yen and Canon Inc decreased 30 yen to 3,380 yen. Sharp Corp declined 7 yen to 617 yen.

Olympus fell 32 yen to 2,193 yen. Fanuc fell 2.3% to 11,130 yen. Kyocera fell 2.8% to 6,720 yen.

Komatsu fell 65 yen to 1,731 yen and Hitachi Construction Machinery Co declined 4.2% to 1,299 yen.