Fuel Imports Drive Japan Trade Deficit Higher, Exports to EU Plunges

Marcus Jacob
22 Aug, 2012
New York City

Stocks in Tokyo traded lower for the second day and trade gap in July was the twelfth in the last nineteen months as Japan imports natural gas to power electricity generating plants. Exports to Western Europe plunged 28% and slowed to the U.S.

[R]6:00 PM Tokyo – Stocks in Tokyo traded lower for the second day and trade gap in July was the twelfth in the last nineteen months as Japan imports natural gas to power electricity generating plants. Exports to Western Europe plunged 28% and slowed to the U.S.[/R]

Stocks in Japan closed lower for the second day after July trade deficit was sharply higher than expected.

The Nikkei 225 Stock Average decreased 25.18 to 9,131.74, the highest since July 4. The broader Topix Index declined 2.53 to 762.73.

Fuel Imports Drive Trade Deficit in July

The latest trade data released by the Ministry of Finance showed trade deficit of 517.4 billion yen or $6.5 billion after a 60.3 billion yen surplus in June.

The island nation reported fifth monthly deficit this year and the twelfth monthly deficit in the last nineteen months.

Total exports decline in the month of 8.1% from a year ago was driven by 25.1% plunge in exports to the European Union. Total exports in the month were 5.3 trillion yen or $67 billion and imports increased 2% to 5.83 trillion yen or $73.6 billion.

Total exports to Asia declined 9% in the month, to North America increased 5% and to Middle East jumped 9% and to Western Europe plunged 28%.

Exports to China declined 11.9%, the largest decline since the fall of 14% in February and second monthly decline in a row.

Trade deficit with the European Union surged to a record high of 95.3 billion yen and exports growth to the United States declined for the third month in a row to 4.7%.

The deficit was drive higher in parts by the continual surge in the imports of the fuel, and liquefied natural gas imports soared 24% in the month from a year ago as only 2 of the 50 nuclear reactors are still operating after the devastating earthquake and tsunami in March 2011.

Stocks in Review

Convenience store chain operators FamilyMart Co Ltd increased 0.6%, Lawson added 0.2% and Seven & I Holdings Co slid 0.2%.

Honda Motor Co. decreased 2 yen to 2,653 yen and Nissan Motor Co Ltd slipped 9 yen to 782 yen.

Nippon Steel closed down 3 yen to 172 yen and JFE Holdings Inc dropped 32 yen to 1,103 yen. Tokyo Steel Manufacturing down 1.3% to 294 yen.

Canon Inc declined 29 yen to 2,701 yen, Seiko Epson Corp climbed 17 yen to 566 yen and Ricoh Co Ltd slipped 10 yen to 642 yen. Sony Corp decreased 10 yen at 932.

Panasonic Corp slumped 15 yen to 570 yen, Toshiba lowered 4 yen to 276 yen and Nikon decreased 9 yen to 2,187 yen. Sharp increased 1 yen to 180 yen.

Nintendo Co. Ltd declined 70 yen at 8,840 yen, Fujitsu slid 0.6% to 333 yen and Pioneer Corp. closed down 5 yen to 222 yen.

Fanuc Ltd gained 60 yen to 13,230 yen and Komatsu Ltd slumped 2 yen to 1,715 yen.

Hitachi Construction Machinery Co decreased 8 yen to 1,431 yen after two more brokerage firms issued cautious outlook for construction equipment demand in China.

Yamada Denki plummeted 95 yen to 4,245 yen. Nitori Holdings Co climbed 160 cents to 7,650 yen, apparel retailer Shimamura gained 20 yen to 9,270 yen and Sagami Co added 2 yen to 134 yen.

Fast Retailing Co. jumped 270 yen to 18,190 yen and J. Front Retailing Co. Ltd increased 7 yen to 407 yen.

Kajima Corp slid 2 yen to 229 yen and Taisei Corp closed up 1 yen at 224 yen. Sekisui House Ltd slipped 4 yen to 748 yen and Daito Trust Construction Co Ltd jumped 110 yen to 7,770 yen.

Tokyo Tatemono Co., Ltd slid 3 yen to 283 yen and Mitsui Fudosan decreased 3 yen to 1,541 yen and Sumitomo Realty & Development Co. dropped 22 yen to 1,992 yen.

Kansai Electric Power Company, Inc added 1 yen to 651 yen.

Inpex Corp down 0.2% to 477,500 yen and Japan Petroleum Exploration Co. declined 35 yen to 3,165 yen.

Freight shipping companies declined for the second day after the largest mining company BHP confirmed a sharp decline in sales and earnings in its iron ore and base metals division.

Mitsui O.S.K. Lines, Ltd slipped 3 yen to 217 yen, Kawasaki Kisen Kaisha, Ltd down 1 yen to 110 yen and Nippon Yusen K.K. lowered 1 yen to 174 yen.

Mitsubishi UFJ Financial Group added 1 yen to 373 yen and Sumitomo Mitsui Financial Group gained 13 yen to 2,525 yen. Nomura Holdings, Inc decreased 4 yen to 286 yen.

Tokio Marine plummeted 25 yen to 1,948 yen and Mito Securities slipped 2.6% to 151 yen.

Credit Saison Co Ltd dropped 30 yen to 1,829 yen.