Tokyo Wholesale Price at 3-Decade High

123jump.com Staff
10 Jul, 2008
New York City

Japan wholesale prices rose at a faster pace in June than in May on rising fuel and energy prices. The price index rose 5.6% in the month. The index rose sharpest in nearly three decades. Tokyo stocks rose marginally after BNP Paribas SA agreed to purchase 30 billion yen convertible bonds from realtor Urban Corp. The deal lifted the real estate developers. Financial stocks rebounded after speculators returned to the sector.

[R]5:00AM New York, 7:00PM Tokyo - Japan wholesale prices rise 5.6% in June. Current account surplus shrinks 5.9% in May.[/R]

Tokyo market averages rose marginally led by realty stocks after Urban Corp reported yesterday that BNP Paribas SA will buy 30 billion yen worth of convertible bonds from Urban Corp.

Financial stocks also lifted the market on speculation that they were oversold and the market was beginning to self-correct.

Market Sentiment

In Tokyo trading Nikkei 225 gained 0.12% or 15.08 at 13,067.21, and the broader Topix Index edged up 0.4% or 5.23 at 1,290.76.

In the first section of the Tokyo Stock Exchange 9.8 billion shares valued at 960 billion yen were traded and in the second section 141 million shares worth 2.6 billion yen changed hands.

Of the Nikkei 225 stocks 114 rose, 103 declined, and 8 were unchanged. Tokai Carbon Co. led advancers in the index shares with an increase of 6.21% followed by Fukuoka Financial increasing 5.24%.

Wholesale Prices Rise in June

The Bank of Japan reported today on its Web site that the Domestic Corporate Goods Price Index rose to a 27-year high from 4.8% in May to 5.6% at 109.7 in June driven by the increasing prices of raw materials including petroleum, coal, chemical related products and iron and steel.

Economists expected the index to increase less by 5.3%.

The Export Price Index fell to 4.2% from a decline of 5.6% a month ago, while the Import Price Index advanced 17% from 10.8% in May.

According to the report, the import prices were leveraged by higher petroleum and natural gas imports that rose 4.75%.

Current Account Surplus Declines

Japan’s Ministry of Finance reported that the growth in exports slowed from 4.9% in April to 4.2% in May, while the growth in imports eased to 4% in May from 13.4% in April.

Current account surplus growth slowed for the third straight month by 5.9% to 2 trillion yen from the same period a year ago. And the balance of trade in goods and services surplus advanced for the first time in seven months increasing 20.8% to 506.6 billion yen.

The report noted that the income surplus- an indication of the difference between money earned from abroad and remittance to foreign investors- dropped 12.6% to 1.57 trillion yen from a year ago.

Tokyo Office Vacancies Rise

Bloomberg News said today a report released by brokerage Miki Shoji Co. through the Ministry of Land, Infrastructure and Transportation showed that Tokyo office vacancies gained 3.49% in June from 3.29% in May, rising for the fifth consecutive month.

Average office rents in Chiyoda, Chuo, Minato, Shinjuku and Shibuya increased to 22,868 yen per tsubo or $64.88 per square meter in June, from 22,826 yen the previous month.

Similarly, the average rent for existing buildings climbed to 22,379 yen from 22,318 yen per tsubo.

Gainers & Losers

Tokai Carbon Co led advancers in the Nikkei 225 index shares with a rise of 6.21% followed by increases in Fukuoka Financial of 5.24%, in Tokyu Land Corp. of 4.59%, in UNY Co Ltd of 4.54%, and Sumitomo Realty of 4.50%.

Sumitomo Realty and other realty stocks advanced after Urban Corp reported yesterday that BNP Paribas SA will purchase 30 billion yen worth of convertible bonds from the company. Mitsui Fudosan climbed 4.18% and Mitsubishi Estate Co of 3.51% as a result.

Financial stocks recovered after speculators returned to the sector. Resona Holdings spiked 3.64% and Mitsubishi UFJ Financial Group increased 3.46%.

Steelmakers advanced as Nippon Steel said it boost prices of h-beams by 15,000 yen per ton this month. JFE Holdings climbed 3.40% and Nippon Steel jumped 3.32%.

Konami Corp led decliners in the Nikkei 225 index shares with a fall of 5.26% followed by losses in Sapporo Holdings of 4.36%, in Ricoh Co Ltd of 3.72%, in Mitsumi Electric Co. of 3.24% and Inpex Holdings 3.23%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 15.08 or 0.12% to 13,067.21, Hang Seng index in Hong Kong increased 15.97 or 0.07% closed to 21,821.78. ASX 200 index in Australia decreased 74.50 or 1.49% to close 4,937.40. The KL Composite index in Malaysia decreased 4.32 or 0.38% closed to 1,135.49.

The Kospi Index in South Korea increased 18.05 or 1.19% to close at 1,537.43, SET index in Thailand closed higher 0.73 or 0.10% to 721.86 and JSE Index in Indonesia decreased 9.80 or 0.43% to 2,276.23. The Sensex index in India decreased 38.02 or 0.27% to 13,926.24.