Japan Q3 GDP Shrank 1.6%, Nikkei Plunges 2.9%

Hiruki Nakamura
17 Nov, 2014
New York City

Nikkei index in Japan dropped 2.9% after the economy shrank in the latest quarter. GDP in the September shrank 1.6% in the third-quarter ending in September following revised 7.3% decrease I the second-quarter.

[R]4:30 PM Tokyo – Nikkei index in Japan dropped 2.9% after the economy shrank in the latest quarter. GDP in the September shrank 1.6% in the third-quarter ending in September following revised 7.3% decrease I the second-quarter.[/R]

Stocks in Tokyo dropped sharply after the economy shrank in the latest quarter unexpectedly.

On the economic front, in a preliminary report the Cabinet Office said gross domestic product in the third-quarter ending in September unexpectedly shrank by annualized 1.6% followed after revised 7.3% decrease in the second-quarter quarter ending in June.

The economy in the third-quarter dropped 0.4% from the previous quarter after a revised 1.9% decrease in April-June. Private consumption accounting for about 60% of the economy rose 0.4% from the previous quarter.

The Nikkei 225 Stock Average declined 517.03 or 2.9% to 16,973.80 and the broader Topix index dropped 34.28 or 2.5% to 1,366.13.

The yen closed at 116.29 against one dollar.

Stocks in Review

Mitsubishi UFJ Financial Group Inc jumped 2.1% to 659 yen and the banking and security service provider intends to buy back its shares as much as 1.27% for up to 100 billion yen between November 17 and March 31, 2015 and increased its planned dividend for full-year to 18 yen from 16 yen.

Sumitomo Mitsui Financial Group, Inc slipped 1.9% to 4,360.50 yen after the financial service provider is in talks with Citigroup to acquire its retail banking business for about 40 billion yen to 50 billion yen and the Citigroup expected to complete the transaction by the end of this year.

Toray Industries Inc climbed 4.1% to 842.10 yen after the diversified chemical products maker agreed to become the sole supplier of carbon fiber for Boeing’s 777X passenger jet in addition to 787 Dreamliner and receive order worth 1 trillion yen.

The company will build $865 million carbon-fiber plant in South Carolina to meet the new demand.

Takara Holdings Inc declined 4.6% to 806 yen after the soft alcohol beverage and foods maker reported net sales in the first-half ending in September jumped 3.7% to 101.13 billion from 97.56 billion yen a year ago period.

Net income in the quarter plunged 72.3% to 1.83 billion yen compared to 6.61 billion yen and diluted earnings per share declined to 9.09 yen from 32.58 yen in the same period a year ago.