Nikkei in Tokyo in 2-day Decline

Hiruki Nakamura
24 Jul, 2014
New York City

Stocks in Tokyo edged lower and then yen was in focus after Japan reported a decline in June trade deficit. The deficit was still larger than expected and soared to a record high in the first-six months.

[R]4:30 PM Tokyo – Stocks in Tokyo edged lower and then yen was in focus after Japan reported a decline in June trade deficit. The deficit was still larger than expected and soared to a record high in the first-six months.[/R]

Market indexes in Tokyo drifted lower for the second day in a row and SoftBank declined 2% and investors focused on earnings announcements.

The Nikkei 225 Stock Average dropped 44.14 or 0.3% to 15,284.42 and the broader Topix index fell 2.53 to 1,269.86.

The yen closed at 101.41 against one U.S. dollar.

Japan’s Trade Deficit Shrinks in June

The Ministry of Finance reported exports in June unexpectedly dropped 2% following the 2.7% of May but imports climbed 8.4% from a year earlier.

Japan’s merchandise trade deficit in June shrank to 822.2 billion yen following the 910.8 billion yen deficit in May. Japan has recorded trade deficit for 24 months in a row.

Trade deficit was larger than expected but still declined from May indicating that net trade may not be drag as much as feared earlier after the sales tax increase.

In June month, exports decreased 2% to 5.94 trillion yen or $58.5 billion and imports soared 8.4% to 6.76 trillion yen or $66.6 billion.

Imports of fuel and natural gas has been the largest contributor to the monthly deficit and exports have not benefited from the weakening of the yen. Vehicle exports leads all exports and soared 60% from a year ago in the first-half.

Trade deficit in the first-half increased to a record 7.6 trillion yen or $74.9 billion and exports increased 3.2% to 35.1 trillion yen or $346 billion and imports soared 10% to 42.6 trillion yen or $420 billion.

Stocks in Review

Chugai Pharmaceutical Co., Ltd gained 1.3% to 3,050 yen after the pharmaceutical company reported revenues in the first-half ending in June soared 10.4% to 222.02 billion yen from 201.02 billion yen a year ago.

Net income in the quarter climbed 16.5% to 28.90 billion yen compared to 24.75 billion yen and diluted earnings per share jumped to 52.95 yen from 45.41 yen a year earlier.

CyberAgent, Inc increased 0.7% to 4,330 yen after the advertisement company said net sales in the third-quarter ending in June climbed 22.6% to 147.45 billion yen from 120.25 billion yen a year ago period.

Net income in the period plunged 39.9% to 5.82 billion yen compared to 9.69 billion yen and diluted earnings per share dropped to 92.92 yen from 152.80 yen a year earlier.

Fujifilm Holdings Corp jumped 2% to 2,968 yen after the Nikkei newspaper reported that the camera film maker is likely to report operating profit for the quarter ending in June of about 30 billion yen.

Genky Stores, Inc surged 5.3% to 3,700 yen after the pharmaceutical, cosmetics and miscellaneous products retailer reported net sales in the year ending in June jumped 6% to 57.95 billion yen from 54.66 billion yen from a year ago.

Net income in the year soared 88% to 1.17 billion yen compared to 623 million yen and diluted earnings per share increased to 335.03 yen from 178.58 yen a year earlier.

Matsui Securities Co. Ltd slipped 1.9% to 964 yen after the online financial broker reported revenue in the first-quarter ending in June plummeted 43% to 7.49 billion yen from 13.15 billion yen a year ago period.

Profit in the quarter tumbled 49.5% to 2.93 billion yen compared to 5.80 billion yen and earnings per share declined to 11.40 yen from 22.60 yen a year earlier.

Shin-Etsu Chemical Co., Ltd. rose 0.1% to 6,354 yen after the chemical maker reported revenues in the first-half ending in June increased 8.7% to 294.53 billion yen from 270.91 billion yen a year ago.

Net income in the quarter grew 2.8% to 32.92 billion yen compared to 32.03 billion yen and diluted earnings per share gained to 77.31 yen from 75.32 yen a year earlier.