Nikkei in Japan Drops 1.8%; Tankan Survey Optimistic

Nigel Thomas
03 Oct, 2011
New York City

Stocks in Japan declined following the weekend news from the euro zone. The latest tankan survey indicated improved sentiment among large manufacturers in September. Nippon Yusen KK reported higher than estimated loss in the fiscal first half.

[R]6:00 PM Tokyo – Stocks in Japan declined following the weekend news from the euro zone. The latest tankan survey indicated improved sentiment among large manufacturers in September. Nippon Yusen KK reported higher than estimated loss in the fiscal first half.[/R]

Stocks in Japan declined sharply on the growing worries about the euro zone. The sentiment in trading weakened after Greece said it will miss its deficit targets set by international lenders.

Markets in Europe opened sharply lower after Greece said its budget deficit and economic shrinkage in the current and the next year are going to be higher than estimated a month ago.

Greece estimated its deficit in the current year to be 8.5% compared to its target of 7.6% at the time its bailout. Greece also revised its 2012 deficit target higher to 6.8% from 6.5%.

Tankan Survey released by the Bank of Japan showed the sentiment index among large manufacturers increased to 2 in September from -9 in June. The positive number shows rising sentiment and the data met the expectations laid out by economists.

The Nikkei 225 Stock Average decreased 154 or 1.8% to 8,545.29 and the broader Topix index fell 1.9% to 747.11. In the third quarter the Nikkei declined 11.4%.

The yen edged lower to 76.16 from 76.35 against one dollar and fetched 104 yen against one euro.

China''s purchasing managers'' index for the non-manufacturing sector rose 1.7 points from a month earlier to 59.3 in September, survey results from the China Federation of Logistics and Purchasing showed.

Stock Movers

Japan Tobacco Inc increased 1% to 367,000 yen and gained earlier as much as 3% on the speculation that the government may sell its stake in the company to pay for nuclear disaster costs.

Japan Petroleum Exploration Co decreased 81 yen to 2,764 yen and Inpex declined 2.8% to 472,500.

Promise Co, Ltd surged its daily limit to 15% to 759 yen and after the close Sumitomo Financial agreed to pay 780 per share and participate in the share offering that valued the sub-prime lender at $2.7 billion.

The Tokyo Electric Power Company decreased 1 yen to 239 yen.

Dai-ichi Life fell 3.9% to 78,200 yen after Greece said it will miss its deficit target set by international lender in the current and next year.

Toyota Motor decreased 2% to 2,635 yen and Honda Motor Co. fell 34 yen to 2,265 yen and Nissan Motor decreased 7 yen to 686 yen.

Sony Corp fell 4.5% to 1,439 yen, Panasonic Corp declined 31 yen to 723 yen and Canon Inc closed down 60 yen to 3,490 yen. Sharp Corp decreased 18 yen to 638 yen.

Olympus Corp fell 111 yen to 2,306 yen. Fanuc Ltd declined 500 yen to 10,330 yen. Kyocera decreased 3.2% to 6,330 yen.

Nippon Yusen KK closed down 9 yen at 202 yen and Mitsui OSK Lines, Ltd fell 21 yen to 279 yen.

Mitsui OSK reported a loss of 17 billion yen in the fiscal first half ending in September on the rising yen and weak shipping freight rates.

Mitsubishi UFJ Financial Group fell 10 yen to 344 yen and Sumitomo Mitsui Financial Group decreased 60 yen to 2,146 yen.

Mitsubishi Corp decreased 76 yen to 1,516 yen and Mitsui & Co fell 60 yen to 1,074 yen.

Komatsu decreased 77 yen to 1,622 yen and Hitachi Construction Machinery Co decreased 35 yen to 1,277 yen.