Nikkei Drops 8.5% in January, Inflation in Japn Accelerates

Hiruki Nakamura
31 Jan, 2014
New York City

Nikkei index in Tokyo declined 0.6% on Friday, fell 3.1% in the week and plunged 8.5% in January. Industrial output in December increased 1.1%. Consumer prices in Japan increased 1.6% and core inflation rose 1.3% from a year ago.

[R]4:30 PM Tokyo – Nikkei index in Tokyo declined 0.6% on Friday, fell 3.1% in the week and plunged 8.5% in January. Industrial output in December increased 1.1%. Consumer prices in Japan increased 1.6% and core inflation rose 1.3% from a year ago.[/R]

Market indexes in Japan and in Asia continued their downward slide and investors looked to international markets for direction.

On the economic front, the Ministry of Economy, Trade and Industry reported seasonally adjusted industrial output in December jumped 1.1% from November. Compared to year ago month industrial production climbed 7.3%.

For the fourth-quarter, industrial production climbed 1.9% on quarter.

The Ministry of Internal Affairs and Communications said overall nationwide consumer prices in December increased 1.6%, unchanged from the previous month.

Core inflation in food prices at annual rate was volatile and increased 1.3% on a monthly basis, overall inflation rose 0.1% and core Consumer Price Index was flat.

Core CPI in Tokyo grew 0.7% which was in-line with expectations and unchanged from the previous month. On a month basis, overall Tokyo CPI fell 0.4% and core inflation slid 0.6%.

The ministry added seasonally adjusted unemployment rate in December dropped 3.7% compared to 4% in November.

Additionally, department said average household spending climbed 0.7% from a year ago in December to 334,433 yen followed by 0.2% increase in November.

The Nikkei 225 Stock Average slipped 92.53 or 0.6% to 14,914.53 and the Topix index slid 3.45 to 1,220.64.

For the week, Nikkei 225 declined 3.1% and for the month tumbled 8.5%.

The yen fell to close at 102.47 against the U.S. dollar.

Stocks in Review

Toyota Motor Corp dropped 138 yen to 5,998 yen.

Honda Motor Co declined 101 yen to 3,903 yen after the carmaker reported net sales in the third-quarter ending in December soared 24.8% to 3.02 trillion yen from 2.42 trillion yen a year earlier.

Net income in the quarter surged 107.6% to 160.7 billion yen compared to 77.4 billion yen a year ago period.

Nissan Motor Co Ltd slumped 22 yen to 892 yen.

Sony decreased 39 yen to 1,651 yen.

Softbank Corp fell 144 yen to 7,675 yen. Fast Retailing Co slipped 595 yen to 38,765 yen.

Fujifilm Holdings Corp jumped 2.7% to 3,027 after the film and camera maker reported revenue in the third-quarter ending in December jumped 9.2% to 600.1 billion yen from 549.6 billion yen a year ago.

Net income in the quarter surged 68.9% to 31 billion yen compared to 18.4 billion yen a year earlier.

The company said revenues from the imaging solutions segment soared 16.9% to 101.7 billion yen and revenue from the information solutions segment surged 37.2% to 223.3 billion. The document solutions segment revenue climbed 45.9% to 275.2 billion.

The company added total domestic revenues jumped 40.5% while international revenues surged 59.5%.

The company lifted its revenue guidance for the year to 2,400 billion yen from 2,350 billion yen, an increase of 8.4% and net income for the year will be 80 billion yen, increase of 47.4% from a year earlier.

JFE Holdings, Inc declined 3.4% to 2.160 yen after the steel products maker said revenue in the third-quarter ending in December jumped 14.6% to 2.64 trillion yen from 2.31 trillion yen a year earlier.

Net income in the quarter climbed to 76.1 billion yen compared to 21.9 billion yen and earnings per share soared to 131.86 yen from 39.83 yen a year ago period.

Japan Tobacco Inc soared 5% to 3,197 after the tobacco producer said revenue in the third-quarter ending in December climbed 13% to 620.8 billion yen from 551 billion yen in the same period a year earlier.

Net profit in the quarter jumped 29% to 122.1 billion yen compared to 94.9 million yen a year earlier.

The company raised its outlook for net revenues to 2.390 trillion yen from 2.368 trillion yen and profit to 423 billion yen from 415 billion yen from a year ago.

Konica Minolta Inc surged 6.9% to 1,092 yen after the Japan-based electric and electronics products maker said its board of directors has approved to buy back shares of about 20 billion yen.