Japan Finance Minster Resigns; Stocks Drop 1.4%

Darlington Musarurwa
17 Feb, 2009
New York City

Japan stock indexes declined after index for demand for services dropped in December. Passenger car sales from the eight biggest car makers will drop in the current fiscal year. Finance Minister Nakagawa resigned after he appeared intoxicated at a press conference after G-7 meeting.

[R]5:00AM New York, 7:00PM Tokyo – The index for demand for services in Japan drops 1.6% in December. Sales at eight big carmakers in Japan decline 13% to 19.4 million in 2008.[/R]

Japan stock indexes plunged after index for demand for services dropped in December as disposable incomes fell and consumer spending waned. A private report also indicated passenger car sales from the country''s eight biggest car makers will drop in the fiscal year ending March.

Finance Minister Nakagawa resigned after criticism from the opposition party suggested that he appeared intoxicated at a press conference after the meeting of G-7 finance ministers and central bankers. Nakagawa denied that he was under the influence of alcohol and blamed his lack of attention on medication and jet lag.

The resignation is another blow to Prime Minister Aso as he suffers from low level of approval rating among voters.

In Tokyo trading Nikkei 225 index fell 1.4% or 104.66 to 7,645.51, and the broader Topix Index slipped 1.8% or 13.57 to 756.53.

In the first section of the Tokyo Stock Exchange 16.4 billion shares worth 1 trillion yen were traded and in the second section 356 million shares worth 1.9 billion yen changed hands.

Of the Nikkei 225 index stocks, 31 rose, 187 declined, and 7 were unchanged. Bridgestone Corp. led advancers in the index shares with a rise of 5.2% followed by Dentsu Inc gaining 4%.

Services Index Falls 1.6% in December

Japan''s Ministry of Economy Trade and Industry reported today that the country''s Tertiary Industry Activity declined 1.6% to 106 in seasonally adjusted terms in December.

Industries that contributed to the plunge were wholesale and retail trade 3.5%; information and communications 3.9%; compound services 1.4%; transport 3.5%; finance and insurance 2.7%; medical, health care and welfare 1.7%; electricity, gas, heat supply and water 3.1%; and learning support 2.9%.

METI also reported that industries that increased were services 1.9%; real estate 2.2%; and eating and drinking places, accommodations 2.1%.

Eight Carmakers Sales Fall 13%

Nikkei News reported today that Japan’s eight biggest manufacturers expects sales to drop 13% to 19.4 million vehicles from the same period a year earlier as demand slows due to deteriorating economic conditions on the global financial markets.

Gainers & Losers

Bridgestone Corp. led advancers in the Nikkei 225 index shares with a rise of 5.2% followed by increases in Dentsu Corp. of 4%, in Sumitomo Osaka of 2.3%, in Eisai Co. Ltd. of 2.2%, and Obayashi Corp. of 2.2%.

T& D Holdings led decliners in the Nikkei 225 index shares with a decline of 9.9% followed by losses in Sapporo Holdings of 9.7%, in CSK Holdings Corp. of 8.1%, in GS Yuasa Corp. of 7.1%, and Teijin Ltd. of 6.8%.

J Front Retailing to buy Department store for 37 billion yen

Nikkei News reported today that J Front Retailing Co. will buy Sogo department store''s flagship in Osaka from rival retailer Seven & I Holdings for 37 billion yen.