Sharpest Increase in Inflation in Japan in 32 Years

Hiruki Nakamura
27 Jun, 2014
New York City

Nikkei Stock Average declined 1.4% on Friday and extended weeklong decline 1.7% after the latest measure of inflation showed an increase of 3.7% in May. Consumer spending declined 8% after the hike in sales tax and rising utility and gasoline prices.

[R]4:30 PM Tokyo – Nikkei Stock Average declined 1.4% on Friday and extended weeklong decline 1.7% after the latest measure of inflation showed an increase of 3.7% in May. Consumer spending declined 8% after the hike in sales tax and rising utility and gasoline prices.[/R]

Market indexes in Tokyo plunged 1.4% and extended weeklong decline to 1.7% after the latest measure of inflation showed the sharpest jump in 32 years.

The Ministry of Internal Affairs and Communications said Japan''s core consumer price index in May jumped 3.4% from a year earlier, the fastest increase in 32 years after utility price hike and an increase in sales tax.

The overall inflation was 3.7% and prices excluding perishables and energy gained 2.2%. Electric utilities charges soared 11.4% and retail price of petrol at pump stations increased 9.6%. Fresh food prices soared 14.3%.

Separately, the same ministry said average household spending in May declined 8% to 271,411 yen.

The Ministry of Economy, Trade and Industry reported retail sales in May slipped 0.4% to 11.434 trillion yen. On a seasonally adjusted monthly retail sales climbed 4.6%.

The Nikkei 225 Stock Average dropped 213.49 or 1.4% to 15,095 and the broader Topix index slumped 10.28 or 0.8% to 1,253.15. For the week, Nikkei 225 dropped 1.7%.

The yen rose to close at 101.37 against one U.S. dollar.

Stocks in Review

Artnature Inc slid 0.2% to 2,923 yen after the custom-made wigs maker said net sales in the year ending in March climbed 14% to 40.02 billion yen from 35.09 billion yen a year ago.

Net income in the year surged 35.5% to 3.13 billion yen compared to 2.31 billion yen and diluted earnings per share jumped to 193.83 yen from 145.13 yen a year earlier.

J. Front Retailing Co Ltd slipped 1.5% to 703 yen after the department stores operator reported net sales in the first-quarter ending in May jumped 3.6% to 285.32 billion yen from 275.29 billion yen a year ago period.

Net income in the quarter plunged 72.9% to 4.92 billion yen compared to 18.14 billion yen and diluted earnings per share declined to 9.33 yen from 34.35 yen a year earlier.

Nagaileben Co., Ltd fell 0.7% to 2,069 yen after the medical equipment maker stated net sales in the year ending in May climbed 5.2% to 13.08 billion yen from 12.43 billion yen a year ago.

Net income in the year dropped 5.7% to 2.69 billion yen compared to 2.86 billion and earnings per share slipped to 78.67 yen from 83.13 yen a year earlier.