Nikkei Nears One-Month Low, Industrial Production Falls 1.2%

Nigel Thomas
31 Aug, 2012
New York City

Market indexes in Tokyo traded lower and the benchmark index fell to a one-month low after industrial production declined in July. The consumer price index barely increased stoking fears of deflation. Machinery makers fell for the second week on the worries of falling orders from mining companies.

[R]6:00 PM Tokyo – Market indexes in Tokyo traded lower and the benchmark index fell to a one-month low after industrial production declined in July. The consumer price index barely increased stoking fears of deflation. Machinery makers fell for the second week on the worries of falling orders from mining companies.[/R]

Industrial production declined 1.2% in July from the previous month according to the data released by the Trade Ministry today.

Separately, consumer prices excluding food decreased 0.3%, below the central bank’s target of 1%. Jobless rate across the nation was held at 4.3% in the month according a government report released today.

In addition, Prime Minister Yoshihiko Noda’s government released plans to cut state spending of as much as 1.4 trillion yen as the government is expected to run out of cash this October.

The ruling Democratic Party passed the deficit government spending bill in the lower house on Tuesday but is likely to not pass in the upper house controlled by the opposition.

The Nikkei 225 Stock Average declined 143.87 or 1.6% to 8,839.91 and the broader Topix Index slumped 12.15 or 1.6% to 731.64.

For the week, the Nikkei dropped 2.5% and for the month of August the index increased 1.7%.

Stocks in Review

Renesas Electronics plunged 9% or 26 yen to 263 yen and lost one third of the gains on the speculation that the company may win investment from a private equity group.

Honda Motor Co. dropped 61 yen to 2,472 yen and Nissan Motor Co Ltd slipped 11 yen to 730 yen.

Nippon Steel declined 9 yen or 5.65 to 151 yen and JFE Holdings Inc plummeted 51 yen or 4.9% to 988 yen. Tokyo Steel Manufacturing slumped 2.7% to 255 yen.

Canon Inc slipped 69 yen to 2,595 yen and Seiko Epson Corp dropped 26 yen or 4.9% to 502 yen and Ricoh Co Ltd dropped 24 yen to 616 yen. Sony Corp declined 25 yen at 881.

Panasonic Corp slipped 17 yen to 532 yen and Toshiba decreased 7 yen to 250 yen and Nikon dropped 69 yen to 2,152 yen.

The volatile Sharp Corp. tumbled 29 yen or 12.8% to 198 yen after Taiwan based Hon Hai chairman Terry Gou left abruptly from Japan before finalizing the long awaited investment agreement.

Olympus slid 0.5% to 1,545 yen, Nintendo Co. Ltd dropped 160 yen at 8,720 yen, Fujitsu decreased 1.2% to 318 yen and Pioneer Corp. slipped 6 yen to 207 yen.

Daikin Industries, Ltd. decreased 1.3% to 2,085 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.

Mining equipment and machinery makers extended losses in nine of the last ten sessions.

Fanuc Ltd declined 190 yen to 12,790 yen and Komatsu Ltd plummeted 34 yen to 1,540 yen. Hitachi Construction Machinery Co slumped 34 yen to 1,296 yen.

Retailers rebounded a day after monthly retail sales declined.

FamilyMart Co Ltd, the convenience chain operator gained 15 yen to 3,775 yen, Lawson jumped 110 yen to 6,000 yen and Seven & I Holdings Co plummeted 64 yen to 2,375 yen. Ito En Ltd decreased 8 yen to 1,557 yen.

Yamada Denki slumped 70 yen to 3,770 yen. Nitori Holdings Co gained 30 cents to 7,840 yen, apparel retailer Shimamura climbed 80 yen to 9,290 yen and Sagami Co slid 4 yen to 125 yen.

Fast Retailing Co. closed unchanged at 18,270 yen and J. Front Retailing Co. Ltd slid 2 yen to 391 yen.

Kajima Corp slipped 4 yen to 217 yen and Taisei Corp decreased 4 yen to 213 yen. Sekisui House Ltd slid 5 yen to 733 yen and Daito Trust Construction Co Ltd slumped 50 yen to 7,640 yen.

Tokyo Tatemono Co., Ltd lowered 4 yen to 259 yen and Mitsui Fudosan declined 21 yen to 1,453 yen and Sumitomo Realty & Development Co. dropped 30 yen to 1,909 yen.

Inpex Corp slipped 2.4% to 445,000 yen and Japan Petroleum Exploration Co. slumped 60 yen to 3,040 yen.

Mitsui O.S.K. Lines, Ltd slid 2 yen to 196 yen and Kawasaki Kisen Kaisha, Ltd closed unchanged at 105 yen and Nippon Yusen K.K. down 1 yen to 158 yen.

Mitsubishi UFJ Financial Group decreased 8 yen to 356 yen and Sumitomo Mitsui Financial Group dropped 52 yen to 2,424 yen. Nomura Holdings, Inc added 1 yen to 258 yen.

Tokio Marine declined 40 yen to 1,874 yen and Mito Securities closed unchanged at 134 yen.

Credit Saison Co Ltd slumped 26 yen to 1,831 yen.