Nikkei Drops to 31-month Low; Toyota, SMFG, Nippon Yusen Down

Nigel Thomas
24 Nov, 2011
New York City

The benchmark index in Japan fell to the lowest in the year and dropped to the low last seen in April 2009. Failed German debt auction highlighted the deepening stress in the euro zone that may extend to UK and U.S. Exporters to Europe led the decliners and freight ship liners plunged to a new 1ow.

[R]7:00 PM Tokyo – The benchmark index in Japan declined to the lowest in the year and dropped to the low last seen in April 2009. Failed German debt auction highlighted the deepening stress in the euro zone that may extend to UK and U.S. Exporters to Europe led the decliners and freight ship liners plunged to a new 10-year low.[/R]

Stocks in Japan declined and the benchmark index dropped to the lowest in the month and traded at the lows last seen in November.

Market sentiment was weak after China’s manufacturing index declined at the sharpest since March 2009.

Investors were also unnerved after German debt auction failed to attract enough buyers for its 10-year bonds auction of 6 billion euros. Germany has been struggling to sell its entire debt auction since summer but the level of interest was the lowest in the year. Earlier in July and August debt auction failed to sell 10% and 15% of its estimated bonds respectively.

Asian markets continued their slide on the growing worries that the failed German auction is another indication of the widening debt stress as yields in the euro zone trade near the recent highs.

The failure of the auction raises doubts as to how long the European Central Bank, France and Germany will be able to avoiding lending new funds to struggling economies in the region.

The declines in indexes were across the board on both sides of the Atlantic as markets dropped between 1.9% and 3%. Milan, Spain and Norway plunged more than 2%.

The Nikkei 225 Stock Average decreased 1.8% to 8,165.18 and the broader Topix index rose 1.6% to 706.08.

The yen at close in Tokyo trading fell 0.2% to 77.11 per U.S. dollar.

Trading volume increased to 1.51 billion from 1.23 billion shares on Monday and lower than the weekly average of 1.74 billion shares. In trading, 857 shares gained and 643 declined.

Stock Movers

The new exchange will have combined value of stocks listed of $12 trillion and is set to begin operation in January 2013.

Toyota Motor decreased 11 yen to 2,376 yen and Honda Motor Co. rose 1 yen to 2,196 yen and Nissan Motor Co Ltd decreased 8 yen to 657 yen.

Toyota has lost 36% since July 8 peak, Nissan has declined 22% and Honda has fallen 30%.

Sony Corp increased 26 yen to 1,331 yen, Panasonic Corp closed up 6 yen at 686 yen and Canon Inc fell 40 yen at to 3,265 yen.

Nintendo Co. Ltd fell 490 yen or 4.3% to 10,860 yen.

Olympus Corp increased 150 yen or 17% to 1,019 yen after the independent panel investigating the latest transactions said it found no link to criminal groups so far.

Equipment and robots makers declined after a private survey in China showed the sharpest decline in manufacturing since March 2009.

Fanuc Ltd decreased 410 yen to 11,850 yen and Kyocera closed up 170 yen at 6,380 yen. Nikon Corp fell 9 yen to 1,693 yen.

Elpida Memory Inc surged 10% to 355 yen.

Shipping companies dropped to new 10-year lows for the third day in a row on the worries linked to the euro zone and the freight rate to Europe declined.

Mitsui O.S.K. Lines, Ltd rose 1 yen to 220 yen, Kawasaki Kisen Kaisha, Ltd declined 6 yen to 119 yen and Nippon Yusen K.K. decreased 4 yen at 154 yen.

Dai-ichi Life decreased 2,000 yen to 76,400 yen.

Ms&Ad Insurance Group Holdings, Inc fell 21 yen to 1,430 yen and NKSJ Holdings Inc fell 36 yen to 1,455 yen.

Mitsubishi UFJ Financial Group fell 4 yen at 320 yen and Sumitomo Mitsui Financial Group decreased 39 yen to 2,029 yen.

Komatsu Ltd decreased 77 yen to 1,818 yen and Hitachi Construction Machinery Co decreased 51 yen to 1,279 yen.