Japan's Jobless Rate Eased In June, Komatsu Reiterated Annual Outlook

Akira Ito
30 Jul, 2024
Tokyo

Stocks in Tokyo struggled to find a clear direction as the Bank of Japan kicked off its two-day policy meeting. 

The Nikkei 225 increased by 0.4% and the Topix declined by 0.2% as investors debated the future rate path amid growing calls for the central bank to provide clarity about its plan to shore up the yen. 

The Bank of Japan is expected to leave its key lending rate range unchanged between zero and 0.1%, despite growing calls for a rate hike and demands to support the faltering yen. 

The yen closed at 154.88 against the U.S. dollar in Tokyo trading as investors dialed down expectations of an imminent rate cut. 

Policymakers are also expected to provide clarity about the central bank's plans to taper the government bond purchase program over the next two years. 

On the economic front, Japan's unemployment rate unexpectedly declined to 2.5% in June, an improvement from 2.6% in May, according to the Ministry of Internal Affairs and Communications reported Tuesday. 

The number of employed people increased from 370,000 to 68.2 million, a record high since record-keeping began in 1953. 

The total number of jobless fell 3.3% to a seasonally adjusted 1.76 million, as voluntary separations declined in the month. 

The job availability ratio eased by 0.01 percentage points to 1.23, the third monthly decline, according to a separate report released by the Ministry of Health, Labor, and Welfare. 

The latest update showed that there were 123 jobs available for every 100 job seekers. 

 

Japan Movers 

The Nikkei 225 stock average increased by 0.4% to 38,525.95, and the Topix decreased by 0.2% to 2,754.45. 

Advantest Corp. increased 0.7% to ¥5,772.0, Tokyo Electron advanced 0.8% to ¥28,880.0, and Screen Holdings rebounded from a 0.5% loss to close unchanged at ¥11,810.0. 

Disco Corp. declined 1.7% to ¥46,750.0, Rakuten Group fell 1.6% to ¥889.70, and Nippon Electric Glass decreased 3.7% to ¥3,528.0. 

Komatsu dropped 4.8% to ¥4,304.0 despite the construction machinery maker reporting an increase in revenue and earnings in the fiscal first quarter ending in June. 

Sales in the quarter increased to 959.8 billion yen from 899.5 billion yen, net income rose to 109.7 billion yen from 105.4 billion yen, and diluted earnings per share rose to 116.47 yen from 111.48 yen a year ago. 

The company reiterated full-year sales to ease 0.1% to 3.86 trillion yen, net income to fall 11.8% to 347 billion yen, and diluted earnings per share to 366.81 yen. 

The company estimated the full-year dividend to remain unchanged at 167 yen per share.