Nikkei Eases Ahead of Sales Tax Vote Tomorrow

Nigel Thomas
25 Jun, 2012
New York City

Stocks in Tokyo fell for the second day in a row and retailers, resource and shipping sector stocks led the decline. The yen gained a fraction and energy prices fell as investors question the outcome of the latest meeting of the European leaders.

[R]6:30 PM Tokyo – Stocks in Tokyo fell for the second day in a row and retailers, resource and shipping sector stocks led the decline. The yen gained a fraction and energy prices fell as investors question the outcome of the latest meeting of the European leaders.[/R]

Stocks in Tokyo traded lower as lawmakers are set to vote on social security and tax reform tomorrow.

Japan is likely to pass the increase in sales tax from 5% to 10% by 2015 and local media reported over the weekend that ruling Democratic Party and the opposition are ready to vote on the bill tomorrow.

The Nikkei 225 Stock Average declined 63.73 to 8,734.62 and the broader Topix index slipped 5.70 to 745.22.

Investors also paid attention to the European Central Bank announcement to accept wider collateral to offer cheap loans. However political leaders are still struggling to devise a comprehensive plan to halt the widening debt crisis.

Domestically investors are looking ahead to sales tax vote tomorrow as the government tackles the highest deficit among the developed nations in the world and tighten budgets and reform social security.

The yen halted a three-day slide and closed at 80.08 against one dollar and rose to 100.12 against the euro.

Stock Movers

Stocks in mining and steel sectors declined after prices of gold, copper and oil fell as the euro crisis lingers on and investors factor rising prospects of a global slowdown.

Astellas Pharma Inc increased 1.5% or 50 yen to 3,315 yen after the drugmaker won approval for additional use of its Symbicort Turbuhaler for adult asthma patients in Japan.

Kansai Electric Power Company, Inc slumped 23 yen to 922 yen and Tokyo Electric Power decreased 5 yen to 166 yen.

Toyota Motor slid 5 yen to 3,080 yen and Honda Motor Co. declined 25 yen to 2,661 yen and Nissan Motor Co Ltd slumped 20 yen to 728 yen.

Sony Corp shrank 28 yen to close at 1,135 yen and Panasonic Corp closed up at 4 yen to 632 yen. Toshiba fell 2 yen to 297 yen.

Renesas Electronics Corp decreased 9 yen to 325 yen and local media reports suggested that the company may sell 50 billion yen in stocks to a private equity group KKR.

Olympus Corp gained 10 yen to 1,206 yen, Nikon dropped 23 yen to 2,375 yen and Fanuc Ltd declined 200 yen to 12,620 yen. Canon Inc plummeted 80 yen to 3,170 yen.

Komatsu Ltd slipped 22 yen to 1,866 yen and Hitachi Construction Machinery Co slid 19 yen to 1,481 yen after Chinese manufacturing shrank for the eight month in a row.

Inpex Corp slumped 4% to 434,500 yen and Japan Petroleum Exploration Co. dropped 56 yen to 2,949 yen as the prices of crude oil fell in international markets.

Mitsui O.S.K. Lines, Ltd decreased 8 yen to 281 yen; Kawasaki Kisen Kaisha, Ltd fell 1 yen to 154 yen and Nippon Yusen K.K. shrink 4 yen to 209 yen.

Fast Retailing Co. declined 40 yen to 15,310 yen and J. Front Retailing Co. Ltd fell 6 yen to 386 yen.

Mitsubishi UFJ Financial Group slid 4 yen to 364 yen and Sumitomo Mitsui Financial Group slumped 12 yen to 2,501 yen. Nomura Holdings, Inc slid 6 yen to 281 yen.

Credit Saison Co Ltd gained 10 yen to 1,602 yen.

Tokyo Tatemono Co., Ltd fell 4 yen to 284 yen and Mitsui Fudosan rose 1 yen to 1,434 yen and Sumitomo Realty & Development Co. slipped 13 yen to 1,822 yen.

Nippon Steel down 1 yen to 177 yen and JFE Holdings Inc slumped 13 yen to 1,308 yen.