Correction in Volatile Japanese Markets Continues

Hiruki Nakamura
06 Jun, 2013
New York City

Tokyo stocks closed lower in volatile and directionless trading as retail investors drove total trading volume of 4.4 billion shares. Foreign investors were the largest net sellers of stocks last week since March. Yen traded below 100-mark.

[R]5:30 PM Tokyo – Tokyo stocks closed lower in volatile and directionless trading as retail investors drove total trading volume of 4.4 billion shares. Foreign investors were the largest net sellers of stocks last week since March. Yen traded below 100-mark.[/R]

Market indexes in Tokyo declined and the widely followed indexes pared gains of the year so far to 24% from as high as 33% only a month ago.

Foreign investors sold most Japanese stocks last week since March, according to data released by Ministry of Finance.

Developed markets are not supposed to like this. The choppy and volatile trading in Tokyo in the last two months has only highlighted the dependence on the foreign investors.

Investors are recalibrating their earnings expectations as the new government works to devise policy measures for structural reforms. In addition, retail investor participation has doubled in trading since November, before the rally started.

The Nikkei 225 Stock Average slid 110.85 or 0.8% to 12,904.02 and Topix index declined 19.26 or 1.8% to 1,070.77.

The Nikkei index closed at a 2-month low after reaching a 5-year high.

The yen strengthened closed at 99.06 against one dollar in today’s trading.

Stocks in Review

Toyota Motor Corp slipped 90 yen to 5,640 yen and Honda Motor Co. down 35 yen to 3,635 yen and Nissan Motor Co Ltd fell 27 yen to 1,030 yen.

Sony dropped 39 yen to 1,869. Canon Inc slid 35 yen to 3,270 yen and Nikon down 2 yen to 2,465 yen.

Fanuc Corp gained 100 yen to 14,320 yen Softbank Corp lowered 10 yen to 5,100 yen.

Seven & I Holdings Co declined 115 yen to 3,295 yen. Fast Retailing Co. slumped 460 yen to 29,460 yen.

Mitsubishi UFJ Financial Group fell 7 yen to 572 yen and Sumitomo Mitsui Financial Group closed unchanged at 4,060 yen.

Matsui Securities Co., Ltd. dropped 1.7% to 928 yen after the online brokerage company recorded strong trading in May and said value of shares traded from client accounts jumped to 5.86 trillion yen.