Nikkei in Tokyo Declines, Foreign Investors Switch to Japanese Bonds

Nigel Thomas
14 Jun, 2012
New York City

Japanese stocks extended losses as foreign investors sold stocks bonds for the eighth week and added bonds for the third week. Exporters and resource stocks declined after interest rates on Italian and Spanish bonds rose.

[R]6:30 PM Tokyo – Japanese stocks extended losses as foreign investors sold stocks bonds for the eighth week and added bonds for the third week. Exporters and resource stocks declined after interest rates on Italian and Spanish bonds rose.[/R]

Investors stayed on the sidelines and market indexes traded lower as uncertainty reigned in the euro zone.

Adding to the gloom, foreign investors were net sellers for the eighth week last week according to the latest data released by the finance ministry.

The Nikkei 225 Stock Average decreased 18.95 to 8,568.89 and the broader Topix index fell 0.78 to 725.66. The yen in Tokyo closed at 79.64 against one dollar.

Foreign investors sold a net 158 billion yen or $1.99 billion of Japanese stocks last week according to the latest data released by Ministry of Finance. Foreign investors also increased their exposures to Japanese bonds and added 494.2 billion yen of bonds in the week. The net increase in bonds was the third weekly addition in a row after adding 1.023 trillion yen of bonds in the previous week.

Euro zone debt worries reached a new high after Spanish 10-year bond yielded a record high of 6.83% on Wednesday and Italian bond yields were also on the rise ahead of a key debt sale later today.

Investors also stayed on the sidelines on the growing prospects that latest Greek election may not disentangle the nation from the euro zone worries and recession may extend to the fifth year as unemployment surges above 23%.

Stock Movers

Tsugami Corp, the industrial equipment maker dropped as much as 12% and pared losses to 5% after the company denied rumors of cancelled orders.

Kansai Electric Power Company, Inc decreased 18 cents to 1,027 yen and Tokyo Electric Power unchanged to 159 yen.

Chubu Electric Power slumped 2%, Shikoku Electric Power Co slides 1% and Hokkaido Electric Power slipped by 1%.

Toyota Motor declined 35 yen to 3,015 yen and Honda Motor Co. fell 2 yen to 2,544 yen and Nissan Motor Co Ltd decreased 5 yen to 745 yen.

Sony Corp gained 15 yen to close at 1,036 yen and rebounded for the second day from the 32-year low and Panasonic Corp closed up at 14 yen to 567 yen. Toshiba slipped 5 cents to 292 yen.

Olympus Corp fell 2 yen to 1,240 yen, Nikon increased 43 yen to 2,335 yen and Fanuc Ltd declined 190 yen to 13,390 yen. Canon Inc slides 5 yen to 3,210 yen.

Komatsu Ltd gained 10 yen to 1,889 yen, Hitachi Construction Machinery Co increased 11 yen to 1,489 yen. Fanuc slumped 1.4% to 13,390 yen.

Inpex Corp down 1.8% to 433,000 yen and Japan Petroleum Exploration Co. gained 16 yen to 2,951 yen.

Mitsui O.S.K. Lines, Ltd rose 4 yen to 283 yen; Kawasaki Kisen Kaisha, Ltd added 3 yen to 151 yen and Nippon Yusen K.K. up 1 yen to 210 yen.

Fast Retailing Co. shrank 210 yen to 15,290 yen and J. Front Retailing Co. Ltd fell 3 yen to 366 yen as investors begin to factor in the long term impact of higher sales tax.

Mitsubishi UFJ Financial Group rose 2 yen to 350 yen and Sumitomo Mitsui Financial Group increased 56 yen to 2,427 yen. Nomura Holdings, Inc gained 11 yen to 275 yen.

Credit Saison Co Ltd slides 5 yen to 1,518 yen.

Tokyo Tatemono Co., Ltd unchanged to 274 yen and Mitsui Fudosan fell 2 yen to 1,354 yen and Sumitomo Realty & Development Co. plummeted 16 yen to 1,689 yen.

Nippon Steel unchanged to 173 yen and JFE Holdings Inc gained 3 yen to 1,280 yen.