First Monthly Retail Sales Decline in Japan, Nikkei Drops 1%

Nigel Thomas
30 Aug, 2012
New York City

The benchmark index in Tokyo declined 1% after retail sales fell in July and on a decelerating auto sales growth and stagnant wages. Construction machinery stocks declined after iron ore prices fell to the low last seen in 2009.

[R]6:00 PM Tokyo – The benchmark index in Tokyo declined 1% after retail sales fell in July and on a decelerating auto sales growth and stagnant wages. Construction machinery stocks declined after iron ore prices fell to the low last seen in 2009.[/R]

Market sentiment was weak after the latest retail data showed weakening consumer spending in the face of stagnant wages and smaller summer bonuses and falling exports.

Retail sales declined for the first time in eight months as auto sales growth plunged and food and beverage sales declined.

Retail sales in July declined 0.8% from a year ago month and fell 1.5% from the previous month according to the latest data released by the Ministry of Economy, Trade and Industry.

Automobiles sales in the month increased 32.5% from a year ago after rising at 55.3% in the year to April after subsidy for green cars is set to expire in the fourth quarter. Fuel sales in the month declined 7% from a year ago after retail gasoline prices fell.

The Nikkei 225 Stock Average dropped 86.03 to 8,983.78, the highest since July 4. The broader Topix Index decreased 6.24 to 743.79.

Stocks in Review

Renesas Electronics plunged 6.2% or 19 yen to 289 yen after the Nikkei business daily said private equity firm KKR plans to buy additional shares to acquire a controlling stake in the loss making chipmaker.

Ito En Ltd extended gains by 1.1% or 17 yen to a 3-year high of 1,565 yen after the company announced a plan to buyback 0.8% of all outstanding shares and open offices in Vietnam and Myanmar.

Honda Motor Co. decreased 26 yen to 2,533 yen and Nissan Motor Co Ltd slipped 9 yen to 741 yen.

Nippon Steel lowered 6 yen to 160 yen and JFE Holdings Inc slumped 30 yen to 1,039 yen. Tokyo Steel Manufacturing down 2.6% to 262 yen.

Canon Inc plummeted 65 yen to 2,664 yen and Seiko Epson Corp plunged 30 yen or 5.4% to 528 yen and Ricoh Co Ltd dropped 11 yen to 640 yen. Sony Corp decreased 17 yen at 906.

Panasonic Corp slipped 6 yen to 549 yen and Toshiba lowered 6 yen to 257 yen and Nikon declined 28 yen to 2,221 yen. Sharp slid 3 yen to 227 yen.

Olympus gained 0.7% to 1,552 yen, Nintendo Co. Ltd dropped 130 yen at 8,880 yen, Fujitsu slid 0.9% to 322 yen and Pioneer Corp. decreased 5 yen to 213 yen.

Daikin Industries, Ltd. increased 1.9% to 2,112 yen a day after the air-conditioner maker agreed to acquire the U.S. based Goodman Global for 300 billion yen or $3.7 billion.

Fanuc Ltd declined 160 yen to 12,980 yen and Komatsu Ltd plummeted 63 yen to 1,574 yen.

Hitachi Construction Machinery Co slumped 35 yen to 1,330 yen.

Retailers were lower after retail sales fell in July, first monthly decline in eight months.

FamilyMart Co Ltd, the convenience chain operator declined 20 yen to 3,760 yen, Lawson slipped 10 yen to 5,890 yen and Seven & I Holdings Co dropped 50 yen to 2,439 yen.

Yamada Denki dropped 160 yen or 4.1% to 3,840 yen. Nitori Holdings Co climbed 70 cents to 7,810 yen, apparel retailer Shimamura plummeted 50 yen to 9,210 yen and Sagami Co slid 3 yen to 129 yen.

Fast Retailing Co. slumped 250 yen to 18,270 yen and J. Front Retailing Co. Ltd decreased 8 yen to 393 yen.

Kajima Corp slid 3 yen to 221 yen and Taisei Corp up 1 yen to 217 yen. Sekisui House Ltd slipped 11 yen to 738 yen and Daito Trust Construction Co Ltd lowered 10 yen to 7,690 yen.

Tokyo Tatemono Co., Ltd decreased 10 yen to 263 yen and Mitsui Fudosan declined 33 yen to 1,474 yen and Sumitomo Realty & Development Co. slipped 15 yen to 1,939 yen.

Inpex Corp closed unchanged at 456,000 yen and Japan Petroleum Exploration Co. gained 25 yen to 3,100 yen.

Mitsui O.S.K. Lines, Ltd slid 1 yen to 198 yen and Kawasaki Kisen Kaisha, Ltd closed unchanged at 105 yen and Nippon Yusen K.K. dropped 7 yen or 4.2% to 159 yen.

Mitsubishi UFJ Financial Group down 1 yen to 364 yen and Sumitomo Mitsui Financial Group decreased 16 yen to 2,476 yen. Nomura Holdings, Inc slumped 11 yen to 257 yen.

Tokio Marine dropped 18 yen to 1,914 yen and Mito Securities slid 2.2% to 134 yen.

Credit Saison Co Ltd declined 39 yen to 1,857 yen.

Daiichi Sankyo Inc decreased 2.4% and Kyowa Hakko Kirin Co Ltd dropped 4% after the U.S. based partner ArQule Inc suspended late stage trial for its lung cancer treatment. Kyowa Hakko has rights for the sale of lung cancer in Asia and Daiichi is working with ArQule to develop another drug.