Nikkei Falls 2%, Japan Reports 19th Monthly Deficit in a Row

Hiruki Nakamura
20 Feb, 2014
New York City

Nikkei declined 2% after Japan reported 19th monthly trade deficit in a row on a surge energy imports. Weakening growth outlook in China also dragged market sentiment in Tokyo and Asia. Asahi Group estimated a fall in earnings on the impending rise in sales tax.

[R]4:30 PM Tokyo – Nikkei declined 2% after Japan reported 19th monthly trade deficit in a row on a surge energy imports. Weakening growth outlook in China also dragged market sentiment in Tokyo and Asia. Asahi Group estimated a fall in earnings on the impending rise in sales tax.[/R]

Nikkei in Tokyo dropped 2% and trade deficit in January soared on a surge energy import and weaker yen increased import cost more than the rise in exports.

Japan’s trade deficit widened to a record in January to 2.79 trillion yen or $27.2 billion from December’s 1.30 trillion yen. The trade account deficit was the nineteenth in a row.

The Finance Ministry said today that exports in January rose 9.5% and imports surged 25% from a year earlier. The crude oil imports soared 28% from a year ago month and liquefied natural gas imports surged 21.4%.

The yen has fallen 20% in the last 22 months and the decline in yen has failed to lift exports but imports have become costlier, affecting the economic growth.

The trade deficit with China was the widest since the record keeping began in 1979.

The yen declined to a five-year low of 105.41 against the dollar on Jan 2 and has declined 8% in the last one year.

The Nikkei 225 Stock Average declined 317.35 or 2.1% to 14,449.18 and the Topix index slumped 23.96 or 1.9% to 1,194.56.

The yen jumped to 101.92 against the U.S. dollar.

Stocks in Review

Toyota Motor Corp slipped 50 yen to 5,860 yen. Honda Motor Co dropped 102 yen to 3,652 yen. Nissan Motor Co Ltd slumped 24 yen to 909 yen.

Sony slid 7 yen to 1,741 yen.

Softbank Corp fell 140 yen to 7,526 yen. Fast Retailing Co declined 1,195 yen or 3.3% to 34,525 yen.

Asahi Group Holdings Ltd dropped 2.1% to 2,547 yen after the alcohol beverages maker estimated net income in the fiscal year to decline 13% as the sales tax is set to jump to 8% from 5% from April.

Japan Exchange Group Inc declined 2.1% to 2,462 yen after the trading exchanges operator may consider merging three smaller equity markets to simplify business structure.

McDonald''s Holdings Co (Japan) Ltd rose 0.1% to 2,674 yen after the hamburger restaurants operator said it will appoint Sarah Casanova, president of the operating unit in Japan, as president and chief executive officer of the parent company to succeed Eiko Harada.