Japan Trade Deficit, First in 26 Years

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

Japan recorded its first monthly trade deficit in 26 years. Rising energy and coal imports and a decline in exports to the U.S. and Europe contributed to the deficit. The Bank of Japan added liquidity to the market and will carry out four more auctions in the rest of the year.

[R]5:00AM New York, 7:00PM Tokyo- Japan records its first monthly trade deficit.[/R]

Japan stocks fell marginally on the weakness in commodity stocks after metal and oil prices retreated. Japan reported its first trade deficit since November 1982, added to the market decline. Cautious investors also reacted negatively as the U.S. lawmakers questioned the size and scope of the $700 billion bailout plan.

Market Sentiment

In Tokyo trading Nikkei 225 slipped 0.9% or 108.5 to 2,006.53, and the broader Topix Index declined 1.2% or 14.02 to 1,153.95.

In the first section of the Tokyo Stock Exchange 7.3 billion shares valued at 795 billion yen were traded and in the second section 262 million shares worth 2.3 billion yen changed hands.

Of the Nikkei 225 stocks 63 rose, 147 declined, and 15 were unchanged. Toho Zinc led advancers in the index shares with a rise of 3.62%.

Japan Trade Deficit Tops 324 billion Yen

Japan''s Ministry of Finance reported on its Web site today that the country''s trade deficit increased to 324 billion yen in August as imports surged on high oil prices.

The deficit is the first since November 1982.

In the month under review exports edged up 0.3% to 7.56 trillion yen from a year ago, while imports grew 17.3% to 7.38 trillion yen. Petroleum imports spiked 64% and the cost of coal soared by 121%. The shipments to the U.S. plunged 21.8% and exports to Western Europe declined 3.6%.

Bank of Japan Releases 1 trillion yen to Markets

The Bank of Japan reported that it has released 1 trillion yen into the financial system today in order to alleviate the cash squeeze obtaining on the market.

Monetary authorities also added that they accepted bid for $29.6 billion in loans at an average 3.488%, which is part of a $60 billion facility with the U.S. Federal Reserve that is meant to supply the currency to financial institutions.

The report says the operation was conducted yesterday.

The BOJ will conduct four additional dollar lending operations this year. It will lend $10 billion for three months on October 7; $30 billion for one month on October 21; $10 billion for three months on November 4; and $30 billion for one month on November. 18.

Gainers & Losers

Toho Zinc led advancers in the Nikkei 225 index shares with a rise of 3.62% followed by gains in Meiji Dairies of 3.51%, in Meiji Seika of 3.48%, in Shinsei Bank of 3.04%, and Nippon Light Metal of 3.03%.

Tosoh Corp. led decliners in the Nikkei 225 index shares with a fall of 8.51% followed by losses in Mitsui & Co. of 7.07%, in Mitsubishi Corp. of 6.70%, in Mitsui O.S.K. Lines of 6.31%, and Nippon Oil of 6.13%.

Mitsui & Co. fell after oil prices declined 0.8% to $105.73 a barrel.

Commodity stocks also fell as metal prices dipped. Copper plunged 1.4% to $3.1065 a pound. Nippon Mining House slid 4.37% and Inpex tumbled 3.56%.

Shipping lines slumped after the Baltic Dry Index fell 6.1% yesterday. Kawasaki Kisen slipped 5.62% as a result.

Honda Domestic Sales Rise 6.2% in August

Honda reported today on its Web site that the company''s domestic sales increased 6.2% to 39,074 in August and gained 4.9% to 424,752 units in the January-August period.

Production however slid 10.5% to 86,264 units, outside Japan production slumped 2.3% to 209,271 units.

Exports from Japan to North America plunged 42.6% to 23,354 units and shipments to Europe and Asia advanced 17.1% to 11, 813 units and 1.5% to 2,567 units respectively.