Nikkei Falls 1.5% Ahead of BoJ Inflation Target Announcement

Nigel Thomas
21 Jan, 2013
New York City

Nikkei and Topix in Tokyo closed lower ahead of the Bank of Japan announcement tomorrow. Widespread expectation of inflation target revision to 2% has been priced in the latest market rally of 26% in two months that stretched automakers by as much as 40%.

[R]5:00 PM Tokyo – Nikkei and Topix in Tokyo closed lower ahead of the Bank of Japan announcement tomorrow. Widespread expectation of inflation target revision to 2% has been priced in the latest market rally of 26% in two months that stretched automakers by as much as 40%.[/R]

Stocks in Tokyo traded lower as the Bank of Japan began its two day meeting and market has priced in the revision of inflation target to 2%.

The central bank is expected to make an announcement of the target revision after the conclusion of 2-day meeting tomorrow.

The yen in quiet trading closed at 89.54 ahead of central bank’s announcement tomorrow.

The Nikkei 225 Stock Average declined 165.56 or 1.5% to 10,747.74 and the broader Topix Index slipped 6.28 to 905.16.

Stocks in Review

Aircraft component makers were in focus for the second week after the U.S. aviation regulator grounded the entire fleet of Boeing 787 Dreamliners.

GS Yuasa traded volatile as the lithium-ion battery made by the company is prone to overheating when fully charged and appears to be the cause of the Dreamliner grounding.

GS Yuasa rose 3 yen to 318 yen, IHI slid 2 yen to 239 yen and Fuji Heavy Industries declined 45 yen to 1,127 yen. All Nippon Airways Co closed unchanged at 179 yen.

Sharp Corp dropped 13 yen to 331 yen after Reuters reported that the company has halted the production of screens for iPads as Apple manages its inventory.

Toyota Motor Corp. slumped 20 yen to 4,280 yen and Honda Motor Co. decreased 20 yen to 3,420 yen and Nissan Motor Co Ltd slipped 13 yen to 865 yen. Mazda Motor Corp lowered 3 yen 217 yen.

Nippon Steel slid 2 yen to 230 yen and JFE Holdings Inc increased 13 yen to 1,707 yen.

Shimano Inc declined 60 yen to 5,780 yen.

Sony Corp climbed 38 yen to 1,187, Canon Inc slumped 20 yen to 3,330 yen and Nikon dropped 41 yen to 2,634 yen.

Nintendo Co. Ltd declined 140 yen to 9,240 yen and Pioneer Corp. added 1 yen to 224 yen.

Fanuc Corp. plummeted 580 yen to 14,350 yen and Komatsu Ltd slipped 19 yen to 2,353 yen. Hitachi Construction Machinery Co decreased 17 yen to 1,913 yen.

Softbank Corp dropped 52 yen to 2,968 yen.

FamilyMart Co Ltd, the convenience chain operator slumped 25 yen to 3,580 yen and Lawson advanced 60 yen to 6,200 yen. Ito En Ltd slipped 11 yen to 1,715 yen.

Seven & I Holdings Co gained 8 yen to 2,683 yen. Fast Retailing Co. declined 840 yen to 22,590 yen and J. Front Retailing Co. Ltd added 2 yen to 502 yen.

Mitsubishi UFJ Financial Group slid 11 yen to 473 yen and Sumitomo Mitsui Financial Group lowered 15 yen to 3,300 yen. Dai-Ichi Life decreased 3% to 131,400 yen.

Nomura Holdings, Inc decreased 7 yen to 484 yen on the worries that the stock has run ahead of its fundamentals.

Mitsui O.S.K. Lines, Ltd up 3 yen to 300 yen and Nippon Yusen K.K. slid 3 yen to 220 yen.