Japan Exports Decline, Nikkei Drops 3.5%

123jump.com Staff
06 Mar, 2009
New York City

As global economic recession widens, Japan is feeling export pressures. Preliminary exports declined 47% in February and imports fell 28%. Japan is likely to accelerate its direct corporate lending in less than a month as companies find it difficult to borrow money.

[R]5:00AM New York, 7:00PM Tokyo- Japan foreign exchange reserves falls to $1.01 trillion in February and preliminary exports fall 47% to 2.4 trillion yen in February.[/R]

Tokyo stock index fell 3.5% as the finance ministry reported that the country’s foreign exchange reserves declined $1.6 billion in February.

Exports also dropped in the period, raising fears the recession is deepening.

Bank of Japan Deputy Governor Hirohide Yamaguchi also noted that the central bank will buy more corporate bonds to unlock credit in the financial markets.

In Tokyo trading Nikkei 225 fell 3.5% or 260.39 to 7,173.10, falling 5.2% for the week, and the broader Topix Index shed 2.7% or 20.16 to 721.39, declining 4.7% in the week.

In the first section of the Tokyo Stock Exchange 9.6 billion shares worth 578 billion yen were traded and in the second section 72 million shares worth 567 million yen changed hands.

Of the Nikkei 225 index stocks, 13 increased, 209 declined, and 3 were unchanged. All Nippon Airways led gainers in the index shares with a rise of 2.7% after crude oil prices fell 3.9% to $43.60 per barrel.

Foreign Exchange Reserve Falls in February

Ministry of Finance reported today that the country’s foreign exchange reserves fell $1.6 billion to $1.01 trillion in February.

The foreign securities holdings increased by $890 million to $892.34 billion from a month earlier and $6.25 billion of deposits were held with foreign central banks and the Bank of International Settlements, $21.07 billion are with Japanese banks and $60.38 billion are with foreign financial institutions.

Foreign currency deposits fell to $87.81 billion from $91.68 billion in January.

In the period, Japan had $23.42 billion in gold, $2.53 billion in IMF reserve positions, and $2.90 billion in IMF special drawing rights.

Other reserve positions fell to $357 million in February from $366 million the previous month.

Exports Fall 47% in February

Separately, the finance ministry reported that for the first 20 days of February preliminary exports fell 46.5% to 2.4 trillion yen from 4.5 trillion yen in the comparable year ago period.
Imports dropped 38% to 2.5 trillion yen from 4 trillion yen a year earlier, reflecting a trade deficit of 131 billion.

BoJ to Expand Purchases of Corporate Debt

Bloomberg News reported today that Bank of Japan deputy governor Hirohide Yamaguchi said the central bank might expand its purchases of corporate debt to forestall a worsening credit crunch. The purchase are likely to begin in the next fiscal year.

“We can’t deny corporate financing will become even more difficult” toward the fiscal year end on March 31. If that happens, we’ll consider whether we can enhance operations already implemented and act if necessary,” said Yamaguchi.

Gainers & Losers

All Nippon Airways led gainers in the Nikkei 225 index shares with a rise of 2.7% followed by increases in CSK Holdings Corp. of 2%, in Tokyo Gas Co. of 2%, in Osaka Gas Co. of 1.5%, and Chubu Electric Power of 0.9%.

All Nippon Airways and other airliners increased as crude oil prices plunged 3.9% to $43.6 per barrel. Japan Airlines increased 0.5%.

Sumitomo Trust & Banking led gainers in the Nikkei 225 index shares with a drop of 10.8% followed by losses in Tokyu Land Corp. of 9.6%, in Chuo Mitsui Trust of 9%, in Pioneer Corp. of 8.8%, and Shinko Securities of 8.4%.

Shipping lines fell on concern over the health of the global economy. Mitsui OSK Lines fell 7.8% and Nippon Yusen dropped 7.2%.

Steel companies shed. JFE Holdings tumbled 7% and Japan Steel Work dipped 6.7%.

Citigroup to Sell 26% in Monex Group Inc

Yomiuri News reported today that Citigroup will sell its 26% stake in Monex Group Inc valued at 15.3 billion yen. The company has been in discussions with several financial institutions.