Weekly Drop of 6.6% in Tokyo

123jump.com Staff
05 Sep, 2008
New York City

Stocks in Japan fell on the worries that weak global markets and rising commodities prices will lower exports and earnings of local companies. That economic view was reinforced by 7.6% decline in capital spending in the second quarter. Steelmakers and exporters fell sharply. Finance ministry reported a decline in reserve of $7.9 billion to $996 billion and stated that it held 24.6 million ounces of gold.

[R]5:00AM New York, 7:00PM Tokyo - Capital spending in Japan plummets 7.6% in second quarter. Steelmakers and exporters declined.[/R]

Stocks in Japan fell weighed by negative market sentiment fostered by the weaker than expected weekly unemployment claims and lowered economic growth targets in the euro-zone.

Market Sentiment

In Tokyo trading Nikkei 225 fell 2.75% or 345.43 to 12,212.23 and dropped 6.6% for the week and the broader Topix Index shed 2.6% or 30.81 to 1,170.84.

In the first section of the Tokyo Stock Exchange 22 billion shares worth 2.3 billion yen were traded and in the second section 530 million shares valued at 5.3 billion yen changed hands.

Of the Nikkei 225 stocks 18 rose, 204 declined, and 3 were unchanged. Hokuetsu Paper led advancers in the index shares with a rise of 2.93% followed by Nippon Sheet Glass rising 2.50%.

Japan’s Capital Spending Declines 7.6% in Q2

Japan’s Ministry of Finance reported on its Web site today that capital spending in the second quarter ending June dipped by 7.6% significantly higher than anticipated by most economists of 1% decline.

Reserves Drops to $996 billion in August

Separately, the finance ministry also reported that the country’s reserve assets declined by $7.9 billion from the end of July to $996 billion.

According to the report, foreign currency reserves stood at $971 billion, the IMF reserve position topped 1.5 billion, while SDRs and Gold contributed $3 billion and $20 billion respectively. Other reserve assets accounted for $368 million in the month. Japan at the end of the month held 24.6 million troy ounces.

Gainers & Losers

Hokuetsu Paper led advancers in the Nikkei 225 index shares with a rise of 2.93% followed by increases in Nippon Sheet Glass of 2.50%, in Nippon Paper Group of 2.42%, in Kawasaki Kisen of 2.15%, and Inpex Holdings of 2.08%.

Sumco Corp. led decliners in the Nikkei 225 index shares with a fall of 11.26% followed by losses in Nippon Meat Pack of 9.55%, in Kumagai Gumi Co. of 8.93%, in Resona Holdings of 7.39%, and Mazda Motor Corp. of 6.89%.

Financial stocks also fell on weak global markets. Mizuho Financial lost 6.35% and Mizuho Trust & Banking declined 4.05%.

Steel makers also fell on concern that demand, especially from China will decline. Japan Steel Work tumbled 5.24% and Nippon Steel plunged 5.14%.

Exporters also declined after the yen rose to 106.72 yen against the dollar. Komatsu slipped 4.38%, Nikon lost 4.37% and Sony Corp plummeted 4.20%.