Volatile Nikkei Falls 1.6% Ahead of Bond Auction

Hiruki Nakamura
08 Aug, 2013
New York City

Nikkei index in Tokyo reversed early gains and closed down 1.6% and yield on Japanese bonds traded volatile ahead of 2.7 trillion yen bond auction tomorrow. The yen gained. Honda plans to build a new plant in Brazil. Sumitomo Realty reported strong quarterly results.

[R]4:30 PM Tokyo – Nikkei index in Tokyo reversed early gains and closed down 1.6% and yield on Japanese bonds traded volatile ahead of 2.7 trillion yen bond auction tomorrow. The yen gained. Honda plans to build a new plant in Brazil. Sumitomo Realty reported strong quarterly results.[/R]

Stocks in Tokyo closed lower after reversing earlier gains and Japanese government bonds trimmed early losses in trading today.

The Nikkei 225 Stock Average slipped 219.38 or 1.6% to 13,605.56 and the Topix slumped 15.67 or 1.4% to 1,139.59.

The yen gained in Tokyo trading to one-month high to close at 96.33 against one dollar.

Japanese government is scheduled to sell 5-year debt and is targeting to raise 2.7 trillion yen.

The yield on 10-year government bonds increased 0.5 basis point to close at 0.755% and the yield on 5-year bond added 1 basis point to 0.285%.

Stocks in Review

Toyota Motor Corp fell 70 yen to 6,160 yen and the automaker recalled 342,000 Tacoma pickups for seat belts problem.

Honda Motor Co. slid 50 yen to 3,685 yen and the automaker plan to build new automobile production plant in Brazil. Honda Automoveis do sBrasil Ltda will act as automobile production and sales subsidiary in Brazil with annual production capacity of 120,000 units scheduled to start in 2015.

Nissan Motor Co Ltd slid 12 yen to 1,044 yen.

Sony slipped 25 yen to 1,927 yen. Canon Inc rose 5 yen to 3,135 yen and Nikon fell 26 yen to 2,014 yen.

Fanuc Corp declined 160 yen to 15,010 yen and Softbank Corp dropped 170 yen to 6,170 yen.

Seven & I Holdings Co slumped 80 yen to 3,620 yen and Fast Retailing Co. slid 800 to 32,100 yen.

Mitsubishi UFJ Financial Group fell 4 yen to 607 yen and Sumitomo Mitsui Financial Group decreased 55 yen to 4,505 yen.

Chubu Electric Power Co., Inc dropped 1.7% to 1,396 yen after the electricity supplier agree to buy 80% stake of Diamond Power Corp. from Mitsubishi Corp and the transaction is expected to complete before Oct. 1.

Nippon Yusen K.K. rose 1 cent to 289 yen after the marine company expects operating profit from its energy unit to increase 10 billion yen by fiscal 2020 and forecasted net income to drop 30 billion yen in this fiscal year.

Sumitomo Realty & Development Co., Ltd. gained 15 yen to 4,275 yen after the construction company reported sales in the first quarter ending in June soared 40% to 205.7 billion yen. Net income surged 95% to 22.2 billion yen compared to 11.4 billion yen a year ago.

Operating profit in the quarter from residential business segment tripled to 16.8 billion yen from 6.6 billion yen a year earlier.