Stocks in Japan Fall, Global Inflation Worries

123jump.com Staff
12 Jun, 2008
New York City

Japan market averages dropped led by exporters and steelmakers on mounting concerns over the health of the global economy as India and South Africa increased its key rate and oil prices rebounded to a record high. In Tokyo trading Nikkei 225 fell 2% to 13,888.60. JFE Holdings led decliners in the Nikkei 225 index shares with a drop of 6.70% followed by losses in Nikon Corp. of 5.60%, in Kawasaki Kisen of 5.57%, in Daiwa House Industries of 5.51%, and Sompo Japan Insurance of 5.28%.

[R]5:00 AM New York, 7:00PM Tokyo - Tokyo office vacancy rates increased to 3.29% in May.[/R]

Japan market averages plummeted led by exporters and steelmakers on mounting concerns over the health of the global economy as India and South Africa increased its key rate and oil prices rebounded to a record high.

Market sentiment

In Tokyo trading Nikkei 225 fell 2.08% or 294.88 at 13,888.60, and the broader Topix Index declined 1.9% or 26.89 at 1,363.14.

In the first section of the Tokyo Stock Exchange 11 billion shares worth 1.1 trillion yen were traded and in the second section 208 million shares valued at 3.9 billion yen changed hands.

Of the Nikkei 225 stocks 15 gained, 201 declined, and 9 were unchanged. Sky Perfect JSAT led advancers in the index shares with a rise of 6.49% followed by Kyocera Corp. gaining 2.85%.

Tokyo Office vacancy rate rise 3.29% in May

Bloomberg news said today Miki Shoji reported through a report published by the Ministry of Land, Infrastructure and Transportation that the Tokyo office vacancy rate advanced to 3.29% in May from 3.03% in April.

Also the office vacancy rate for new buildings increased to 10.14% in May from 10.07% in the previous month, while the average rents of the reported properties declined to 32,827 yen per tsubo from 32,916 yen per tsubo a month ago (a tsubo measures 3.3 square meters).

Average office rents in Tokyo’s five main business districts of Chiyoda, Chuo, Minato, Shinjuku and Shibuya advanced 22,826 per tsubo in May from 22,687 yen the previous month and average rent for existing buildings in the area increased to 22,318 yen from 22,165 yen.

Government to give 70 billion yen in subsidies

Japan Today reported on its website that the government and the Liberal Democratic Party will provide an additional 70 billion yen in subsidies to dairy farmers and stockbreeders. This will be in addition to the previous 187 billion yen subsidy extended as part of the fiscal 2008 budget.

In essence, the government will raise the unit-subsidy price the government pays to producers of milk processed to manufacture dairy products including butter.

Gainers & Losers

Sky Perfect JSAT led advancers in the Nikkei 225 index shares with rise of 6.49% followed by rises in Kyocera Corp of 2.85%, in Asahi Breweries of 1.79%, in Mitsubishi Electric Corp. of 1.27%, and Kirin Holdings of 0.96%.

Kyocera rose on an investor upgrade.

JFE Holdings led decliners in the Nikkei 225 index shares with a drop of 6.70% followed by losses in Nikon Corp. of 5.60%, in Kawasaki Kisen of 5.57%, in Daiwa House Industries of 5.51%, and Sompo Japan Insurance of 5.28%.

JFE Holdings and other steel makers fell after India raised its key rate, stocking worries that global demand for raw materials will slow. Kobe Steel slumped 4.99% and Nippon Steel shed 4.78%.

Shipping lines also fell as the Baltic Dry Index, which measures freight costs, dropped 2.7% yesterday. Mitsui Engineering & Shipbuilding slipped 4.85% and Mitsui OSK Lines plummeted 4.82%.

Exporters were also affected by a gloomy outlook over the inflation outlook as crude oil prices increased to $138.30 yesterday. Sony Corp fell 2.84% and Casio Computer declined 2.78%.

Asian markets review

In Tokyo Nikkei 225 Index closed lower 294.88 or 2.08% to 13,888.60, in Hong Kong Hang Seng index decreased 303.74 or 1.30% closed to 23,023.86. In Australia ASX 200 index lower 138.10 or 2.53% to close 5,329.20. In Malaysia KL Composite index decreased 3.74 or 0.30% closed to 1,225.54.

In South Korea Kospi Index increased 42.31 or 2.37% to close at 1,739.36, in Thailand SET index closed lower 0.86 or 0.11% to 790.80 and Indonesia JSE Index edged increased 34.22 or 1.44% to 2,409.01. Sensex index in India increased 64.88 or 0.43% to 15,250.20.