Nikkei Fall 1.4%; Machinery Orders Plunge, Current Account Surplus Shrinks

Nigel Thomas
09 Jul, 2012
New York City

Stocks in Japan declined after volatile machinery orders plunged more than expected and current account surplus shrank for the 15th month in a row. China reported a decline in June and confirmed the trend in place for three months.

[R]7:00 PM Tokyo – Stocks in Japan declined after volatile machinery orders plunged more than expected and current account surplus shrank for the 15th month in a row. China reported a decline in June and confirmed the trend in place for three months.[/R]

Stocks in Tokyo traded lower after rising for five weeks in a row and focused on the latest economic data from Japan and China.

Volatile machinery orders plunged 14.8% in May from the previous month. The unadjusted orders in April increased 5.7% and most economists were looking for orders to fall no more than 3%. Core orders not adjusted for seasonality increased 1%, according to the data released by the Cabinet Office.

Separately, current account surplus dropped for the 15th month in a row and dropped 62.6% from a year ago to 215.1 billion yen or $2.7 billion. Economists surveyed by sister publication Ticker.com estimated surplus of at least 500 billion yen.

The Nikkei 225 Stock Average declined 123.87 or 1.4 to 8,896.88 and the broader Topix index slid 7.90 or 1% to 763.93.

The yen traded at 79.73 against one dollar and traded near 100 yen against the euro.

In trading on the main board of the Tokyo Stock Exchange, 535 stocks gained, 1,018 decreased and a total of 1.28 billion shares changed hands. The trading volume was the second thinnest for the year trailing the weakest trading on January 5.

Separately, China reported consumer prices fell 0.6% in June compared to May, the largest monthly decline in two years according to the data released by the National Bureau of Statistics.

Consumer prices increased 2.2% from a year ago and producer prices, the measure of wholesale inflation, increased 2.1% from a year ago in the month.

Stock Movers

Toyota Motor dropped 60 yen to 3,155 yen and Honda Motor Co. plummeted 85 yen to 2,621 yen and Nissan Motor Co Ltd slipped 18 yen to 728 yen.

Sony Corp slumped 22 yen to close at 1,073 yen and Panasonic Corp closed down 4 yen to 618 yen. Toshiba decreased 6 yen to 293 yen. Olympus Corp fell 1 yen to 1,290 yen and Nikon dropped 67 yen to 2,512 yen.

Fanuc Ltd declined 480 yen to 12,740 yen and Canon Inc slumped 65 yen to 3,055 yen.

Machinery makers were lower after the release of volatile orders and also rising prospects of deflation in China. The latest unadjusted inflation data showed a price decline in June in consumer price index.

Komatsu Ltd dropped 78 yen to 1,883 yen and Hitachi Construction Machinery Co slumped 63 yen to 1,412 yen.

Yamada Denki declined 1% to 3,620 yen. Nitori Holdings Co dropped 0.8% to 7,520 yen, apparel retailer Shimamura fell 0.1% to 9,250 yen and Sagami Co slid 3.3% to 116 yen.

Marushohotta Co closed unchanged at 48 yen and Edion Corp slipped 3% to 387 yen.

Fast Retailing Co. plummeted 390 yen to 15,400 yen and J. Front Retailing Co. Ltd increased 7 yen to 415 yen.

Kajima Corp added 3 yen to 230 yen and Taisei Corp gained 2.3% to 222 yen. Sekisui House Ltd rose 0.3% to 763 yen and Daito Trust Construction Co Ltd up 0.3% to 7,610 yen.

Tokyo Tatemono Co., Ltd fell 2 yen to 281 yen and Mitsui Fudosan decreased 17 yen to 1,484 yen and Sumitomo Realty & Development Co. declined 41 yen to 1,861 yen.

Kansai Electric Power Company, Inc gained 13 yen to 919 yen and Tokyo Electric Power fell 1 yen to 152 yen.

Inpex Corp slid 2.1% to 443,500 yen and Japan Petroleum Exploration Co. decreased 50 yen to 3,065 yen.

Ocean freight shipping companies declined after a surge on Friday as the rate index closed lower.

Mitsui O.S.K. Lines, Ltd slipped 5 yen to 276 yen; Kawasaki Kisen Kaisha, Ltd fell 2 yen or 1.5% to 129 yen and Nippon Yusen K.K. down 2 yen to 207 yen.

Mitsubishi UFJ Financial Group decreased 7 yen to 387 yen and Sumitomo Mitsui Financial Group declined 37 yen to 2,610 yen. Nomura Holdings, Inc slipped 7 yen to 281 yen.

Credit Saison Co Ltd closed down 3 yen to 1,723 yen.

Nippon Steel slid 4 yen to 171 yen and JFE Holdings Inc dropped 24 yen to 1,197 yen.