Japan CPI Rises; Shippers, Steel Makers Down

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

Consumer price index in Japan rose at a rate faster than wage gains for the fourth month and rose above 2% for the second month in a row. Food, energy and other daily needs continue to rise. In stock trading, shipping lines and steel companies declined.

[R]5:00AM New York, 7:00PM Tokyo - Japan''s consumer price index rises 2.4% in August.[/R]

Stocks in Tokyo tracking market weakness in the U.S. dropped as the U.S. lawmakers debate alternatives to the proposed $700 billion bailout plan. Markets in Japan and Asia declined. The consumer price index also shot up in August after food and energy prices hover near the recent peaks.

The core inflation which excluded food rose above 2% for the second month in a row, but wage gains are weak and not keeping up with inflation rate. Excluding food, core prices rose 0.2% in July and were flat in August from a year ago. The consumer price index, excluding fresh food rose 0.2% from the previous month and gained 2.4% from a year ago.

Market Sentiment

In Tokyo trading Nikkei 225 fell 0.94% or 113.37 to 11,893.16, losing 0.2% for the week, and the broader Topix Index dropped 0.5% or 6.06 to 1,147.89.

In the first section of the Tokyo Stock Exchange 18 billion shares worth 2 trillion yen were traded and in the second section 495 million shares valued at 4.3 billion yen changed hands.

Of the Nikkei 225 stocks 71 rose, 146 declined, and 8 were unchanged. KDDI Corp. led advancers in the index shares with a rise of 4.99%.

Japan''s CPI Rises 2.4% in August

The Statistics Bureau of Japan reported on its Web site today that the consumer price index for Japan rose 0.3% from the previous month and 2.1% from a year ago to 102.7 in August.

Food prices gained 0.5% in the month and gained 3% from a year earlier; housing was unchanged for the month but edged up 0.2% from a year ago; fuel, light and water charges soared 0.6% and 9.7% from the previous month and year correspondingly, while furniture and household utensils soared 0.5% from a month earlier and 0.2% from the year-ago period.

Clothes & footwear slipped 1.7% from July but advanced 0.3%; medical care lost 0.1% on the month and declined 0.5% from the previous year; transport and communications soared 0.5% from July and 4.7% from last year.

Education remained unchanged for the month and rose 0.7% from 2007.

The consumer price index, excluding fresh food rose 0.2% from the previous month and gained 2.4% from a year ago.

The consumer price index for Ku-area of Tokyo, which is a yardstick for prices in Japan, increased 0.3% from the previous month and advanced 1.4% from a year ago at 101.9 in September.

Food prices gained 0.8% and 2.4% for the month and year correspondingly; housing edged higher 0.1% from August and 0.4% from a year ago; fuel, light and water charges shed 0.1% in the month, but gained 5.8% from a year earlier; furniture and household utensils gained 0.7% from the previous month and dropped 0.1% from last year, while clothes and footwear rose 7.5% from the month and 1.6% from a year earlier.

Medical care slid 0.2% from both the previous month and year, and transport and communication dipped 1.5% from a month earlier but gained 2.3% from last year.

Excluding fresh food, the consumer price index rose 0.2% from August and 1.7% from 2007.

JP Morgan Buys Washington Mutual

Washington Mutual, the 120-years old savings bank was seized by the Federal regulators and its assets and branch network was sold in an auction to JP Morgan Chase.

The bank has lost more than $6 billion in the last three quarters in a row and recently raised $7.2 billion and replaced its longtime chief executive. However, persistent falling home prices and seized credit markets forced WaMu to seek more capital when markets are avoiding investments in banks. Depositors sensing problems at the bank accelerated their account closures in the last ten days forcing the Federal regulators to step in to prevent a bank failure.

Washington Mutual, with $304 billion in assets faced a bank run that started on September 15. In the last ten days depositors withdrew $16.7 billion.

Gainers & Losers

KDDI Corp. led advancers in the Nikkei 225 index shares with a rise of 4.99% followed by increases in Nippon Suisan of 4.41%, in Takeda Pharmaceutical of 4.23%, in NGK Insulators of 4.12%, and Mitsui Sumitomo of 3.50%.

Financial stocks rose. Mitsubishi UFJ Financial Group gained 1.53% and Bank of Yokohama advanced 1.85%.

CSK Holdings led decliners in the Nikkei 225 index shares with a decline of 9.69% followed by losses in GS Yuasa Corp. of 9.56%, in Furukawa Electric of 8.78%, in Kawasaki Kisen of 7.20%, and Mitsui Engineering & Shipbuilding of 6.96%.

Shipping lines slid as the Baltic Dry Index plunged 7.3%. Mitsui O.S.K Lines fell 6.34% and Nippon Yusen tumbled 3.83%.

Steel makers also dropped on concern demand will drop. Kobe Steel plummeted 5.26% and Nippon Steel shed 4.97%.