Nikkei Plunges 2% after Yen Advances 0.8%

Hiruki Nakamura
23 Oct, 2013
New York City

Market indexes in Tokyo plunged 2% as the yen gained 0.8% against the dollar. Rising bad loan worries in China also dragged market sentiment in Tokyo and Asian trading. Nidec Corp first-half sales rose 22%. Japan Exchange first-half revenues rose 67%.

[R]4:30 PM Tokyo – Market indexes in Tokyo plunged 2% as the yen gained 0.8% against the dollar. Rising bad loan worries in China also dragged market sentiment in Tokyo and Asian trading. Nidec Corp first-half sales rose 22%. Japan Exchange first-half revenues rose 67%.[/R]

Stocks in Tokyo plunged after the yen strengthened and Chinese largest bank triples its bad debt write-off in the first half results.

Market indexes opened lower after the yen began strengthening in the early trading and investors worried about the size of bad loans problems in China.

China has supported the latest economic expansion in the last six years with aggressive infrastructure development and easy money for state controlled companies.

However, that also has loosened loan standards and top 10 Chinese banks have reported rising bad debt ratios. Many private analysts estimate significantly larger bad loans than reported by banks.

The Nikkei 225 Stock Average declined 287.20 or 1.9% to 14,426.05 and the Topix slumped 18.46 to 1,195.98.

The yen increased 0.8% to 97.37 against one dollar and gained against all major 16 currencies.

Stocks in Review

Toyota Motor Corp dropped 50 yen to 6,320 yen and Honda Motor Co. declined 110 yen to 3,850 yen. Nissan Motor Co Ltd slipped 19 yen to 997 yen.

Sony decreased 39 yen to 1,896 yen.

Softbank Corp slid 20 yen to 7,600 yen and Fast Retailing Co. plummeted 950 yen to 33,500 yen.

GCA Savvian Corporation climbed 2.6% to 1,095 yen after the Nikkei newspaper reported merger and acquisition advisory company plans to start advisory business in partnership with India-based ICICI Securities Ltd.

Japan Exchange Group Inc declined 3.7% to 2,219 yen after the spot and derivatives market operator reported revenue in the first-half surged 67% to 61.7 billion yen from 37 billion yen a year ago. Net income for the quarter climbed 152% to 16.6 billion yen compared to 6.57 billion a year earlier.

The company lifted its revenue forecast for the year to 105 billion yen compared to 101.5 billion yen and raised operating-profit 5.5% to 38.5 billion yen.

Nidec Corporation soared 4.5% to 9,150 yen after the electric motors maker reported net sales in the first-half ending in September surged 21.5% to 429.6 billion yen from 353.5 billion yen a year ago.

Net income for the period rose 3.5% to 27.1 billion yen compared to 26.2 billion yen and earnings per share grew 3.4% to 201.99 yen from 195.28 yen a year earlier.

The battery maker revised the consolidated financial forecast for the year ending in March 2014 and said net sales are expected to increase 3.7% to 850 billion yen from earlier forecast of 820 billion yen.

Net income is estimated to grow 2.8% to 55 billion yen from 53.5 billion yen announced on July 23.