Japan and Asian Markets Plunge after U.S. Orders Iraq Air Strikes

Hiruki Nakamura
08 Aug, 2014
New York City

Market averages in Tokyo plunged 2.3% in an Asia-wide sell-off after U.S. ordered Iraq strike. The latest military strike contributed the growing turmoil in the Middle East and to the persistent tensions between Russia and Europe. SoftBank quarterly net plunged.

[R]4:30 PM Tokyo – Market averages in Tokyo plunged 2.3% in an Asia-wide sell-off after U.S. ordered Iraq strike. The latest military strike contributed the growing turmoil in the Middle East and to the persistent tensions between Russia and Europe. SoftBank quarterly net plunged.[/R]

Market indexes in Japan plunged 2.3% in Friday’s trading after geopolitical worries overshadowed domestic earnings and current account deficit was lower than expected.

Markets in Japan and Asia declined after the U.S. President Barack Obama ordered air strikes in Iraq on “humanitarian” grounds and prevent rebels from gaining more territory.

The Ministry of Finance reported current account deficit in June of 399.1 billion followed by 522.8 billion yen surplus in May.

The trade balance showed a deficit of 537.1 billion yen beating expectations a shortfall of 592.8 billion yen compared to 675.9 billion yen deficit in the last month.

Exports jumped 4.4% to 6.12 trillion yen while imports surged 13.9% to 6.652 trillion yen from a year earlier.

Meanwhile, overall bank lending in Japan jumped 2.3% in July from a year ago to 414.67 trillion yen, unchanged from the June.

The Nikkei 225 Stock Average plunged 454 or 2.9% to 14,778.37 and the broader Topix index dropped 29.86 or 2.4% to 1,228.26. The decline in indexes was the largest since May 7.

For the week, Nikkei 225 index plunged 4.8%, the largest weekly losses since April 11.

The yen closed at 101.69 against one U.S. dollar.

Stocks in Review

Daifuku Co., Ltd slumped 2.4% to 1,352 yen after the material handling systems and equipment maker reported net sales in the first-quarter ending in June climbed 16.2% to 58.53 billion yen from 50.37 billion yen a year ago period.

Net income in the quarter soared 16.8% to 1.12 billion yen compared to 956 million yen and diluted earnings per share jumped to 9.16 yen from 8.65 yen a year earlier.

Nafco Co., Ltd slipped 1.2% to 1,700 yen after the home furniture retailer stated net sales in the first-quarter ending in June slid 0.9% to 58.56 billion yen from 59.11 billion yen a year ago period.

Net income in the quarter plunged 11.8% to 1.80 billion yen compared to 2.04 billion yen and earnings per share dropped to 60.33 yen from 68.39 yen a year earlier.

SoftBank Corp declined 3.4% to 6,801 yen after the mobile communication services provider reported net sales in the first-quarter ending in June surged 126.1% to 1.99 trillion yen from 881.07 billion yen a year ago period.

Net income in the quarter tumbled 68.3% to 77.57 billion yen compared to 244.38 billion yen and diluted earnings per share plunged to 65.14 yen from 204.80 yen a year earlier.

Sumitomo Realty & Development Co., Ltd decreased 1.5% to 3,935 after the construction company reported revenue in the first-quarter ending in June declined 8.4% to 188.48 billion yen from 205.72 billion yen a year ago period.

Net income in the quarter rose 1.6% to 22.58 billion yen compared to 22.22 billion yen and earnings per share gained to 47.63 yen from 46.87 yen a year earlier.

Yokogawa Electric Corporation plunged 5.4% to 1,253 yen after the measurement control equipment maker said net sales in the first-quarter ending in June grew 2.5% to 82.79 billion yen from 80.76 billion yen a year ago period.

Net income in the quarter tumbled 26.7% to 1.09 billion yen compared to 1.49 billion yen and earnings per share slipped to 4.24 yen from 5.78 yen a year earlier.