Nikkei Reverses 1.5% Decline, Exports Plunge 10.3% on China Dispute

Nigel Thomas
22 Oct, 2012
New York City

The benchmark Nikkei index rose for the sixth day in a row after dropping as much as 1.5%. Exports in September dropped for the fourth month in a row after shipments to China plunged 14%. Regional manufacturing survey showed economic weakness across.

[R]7:00 PM Tokyo – The benchmark Nikkei index rose for the sixth day in a row after dropping as much as 1.5%. Exports in September dropped for the fourth month in a row after shipments to China plunged 14%. Regional manufacturing survey showed economic weakness across.[/R]

The benchmark Nikkei index closed higher for the sixth year in a row after expectations of another central bank action rose after exports fell sharply in September.

The Nikkei 225 Stock Average increased 8.03 to 9,010.71 and the broader Topix Index inched down 0.09 to 753.72.

The Nikkei dropped as much as 1.5% in the session, erasing 5.5% gain last week, but the weakness in the yen supported the index reversal.

The yen weakened against the dollar to 79.60 from 79.35 in Friday’s closing and fell to 104.01 from 103.74.

Japanese exports dropped 10.3% in the year to September, the sharpest decline since the 2011 earthquake and tsunami. In addition, the Bank of Japan lowered its regional economic outlook.

Japanese exports have been falling for four months in a row as the dispute with China knocks off demand and auto, electronics and general machinery makers suffer decline in sales. Exports in the coming months are likely to weaken further as the boycott of Japanese products filters through other industries.

Exports to China dropped 14.1% and to European Union plunged 21.1% in the year to the month.

The sentiment among manufacturers in a regional survey declined to minus 17, a decline of 12 points, and the lowest since January 2010, according to a survey of regional economies.

Stocks in Review

Jupiter Telecom soared its daily limit of 15,000 yen or 18% to 97,700 yen after the Nikkei newspaper reported that the company will acquire Japan Cablenet, a unit of its parent company KDDI Corp.

Mitsubishi Corp dropped 1.8% to 1,404 yen after the company lowered its annual profit outlook by 34% and cut its planned dividend.

Japan Tobacco slipped 1% to 2,291 yen and Japan Airlines Co Ltd closed unchanged at 3,805 yen.

Amada Co. dropped 1.7% to 409 yen after the factory tools maker lowered its annual net income by 58% for the current year ending in March.

Mitsui O.S.K. Lines, Ltd slid 1 yen to 194 yen and Kawasaki Kisen Kaisha, Ltd lowered 1 yen to 101 yen and Nippon Yusen K.K. down 1 yen to 152 yen.

Toyota Motor gained 10 yen to 3,150 yen, Honda Motor Co. increased 28 yen to 2,613 yen and Nissan Motor Co Ltd slipped 5 yen to 704 yen.

Nippon Steel slid 2 yen to 174 yen and JFE Holdings Inc added 2 yen to 1,098 yen. Tokyo Steel Manufacturing closed unchanged at 277 yen.

TDK slumped 30 yen to 3,050 yen, Murata Manufacturing Co dropped 60 yen to 4,070 yen and Meiko Electronics Co Ltd added 0.3% or 629 yen.

Canon Inc increased 5 yen to 2,654 yen and Seiko Epson Corp closed unchanged at 497 yen and Ricoh Co Ltd gained 21 yen to 769 yen. Sony Corp slipped 4 yen to 979.

Panasonic Corp added 2 yen to 520 yen and Nikon up 1 yen to 2,012 yen and Toshiba Corp, closed unchanged at 287 yen.

Olympus Corp. increased 1.4% to 1,409 yen, Nintendo Co. Ltd advanced 70 yen to 10,450 yen, Fujitsu added 2 yen to 316 yen and Pioneer Corp. gained 4 yen to 194 yen. Sharp Corp surged 11 yen or 7.4% to 160 yen.

Machinery makers linked to China exports declined after the release of exports and lowered views from a broker.

Fanuc Corp. declined 330 yen to 12,960 yen and Komatsu Ltd dropped 42 yen to 1,710 yen. Hitachi Construction Machinery Co slumped 25 yen to 1,367 yen.

FamilyMart Co Ltd, the convenience chain operator plummeted 60 yen to 3,690 yen and Lawson decreased 10 yen to 5,770 yen. Ito En Ltd slipped 11 yen to 1,537 yen.

Seven & I Holdings Co slumped 7 yen to 2,419 yen.

Yamada Denki plummeted 65 yen to 3,260 yen. Nitori Holdings Co dropped 40 yen to 6,850 yen, apparel retailer Shimamura gained 30 yen to 8,270 yen and Sagami Co slid 2 yen to 118 yen.

Fast Retailing Co. advanced 170 yen to 17,080 yen and J. Front Retailing Co. Ltd down 1 yen to 418 yen.

Credit Saison Co Ltd added 1 yen to 1,796 yen.

Tokyo Tatemono Co., Ltd increased 9 yen to 343 yen and Mitsui Fudosan gained 7 yen to 1,651 yen and Sumitomo Realty & Development Co. climbed 18 yen to 2,218 yen.

Inpex Corp declined 0.1% to 486,000 yen and Japan Petroleum Exploration Co. climbed 30 yen to 3,520 yen. Tokyo Electric Power Company, Inc. lowered 2 yen to 134 yen.

Mitsubishi UFJ Financial Group closed unchanged at 373 yen and Sumitomo Mitsui Financial Group gained 4 yen to 2,475 yen. Nomura Holdings, Inc added 1 yen to 293 yen.