Japan Lowers Economic Outlook

123jump.com Staff
27 Apr, 2009
New York City

The benchmark Tokyo index closed higher but stocks in broader trading fell. Airlines, tour operators and meat packers declined on the outbreak of swine flu in Mexico. Japan Cabinet Office estimates economy in the current year to shrink 3.3% from the earlier estimate of flat economic growth.

[R]8:00PM Tokyo, 7:00AM New York – The benchmark index closed higher but stocks in broader trading fell. Airlines, tour operators and meat packers declined on the outbreak of swine flu in Mexico.[/R]

Nikkei 225 Stock Average increased 18.35 or 0.2% to 8,726.34 in volatile trading. The outbreak of swine flu in Mexico and its spreading to New Zealand, Spain, U.S. and Canada prompted worries of pandemic.

Cabinet Office in Japan reported that the economy is expected to shrink 3.3% in the current fiscal year ending in March 2010 as exports fall more than 40% and domestic spending weakens.

The fear of swine flu spread around the world, lifted companies associated with anti viral drug makers and hygiene masks makers. Japan Vilene Company soared 19% to 486 yen. The company uses non-woven materials to make industrial and medical materials used in masks and other surgical procedures. Freudenberg Beteiligungs-GmbH in Germany control 25% of the company.

Chugai Pharmaceutical Company increased 14% to 1,845 yen. The company is in partnership with Switzerland company Roche Holding AG.

Airlines, tour operators and meat packers declined on the flu worries.

Japan Airlines declined 4% to 191 yen.

Nippon Meat Packers Inc, the ham and sausage maker dropped 4.4% to 1,010 yen and later in Chicago futures market hog and pork-belly prices dropped by daily limit.

H.I.S. Company plunged 10% to 1,558 yen after Sony Corp and Panasonic Corp asked employees to defer or avoid travels to Mexico. Both companies have plants in regions that are bordering with the U.S.

The talks of merger between two local banks also lifted stocks in banking sector. Shinsei Bank Ltd and Aozora Bank Ltd. surged after media speculation reported merger talks. Shinsei Bank gained 15% to 142 yen and Aozora added 16% to 137 yen.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 18.35 or 0.21% to 8,726.34, Hang Seng index in Hong Kong decreased 418.43 or 2.74% closed to 14,840.42, CSI 300 index in China lower 59.60 or 2.32% closed to 2,513.29. ASX 200 index in Australia increased 19.30 or 0.52% closed to 3,731.60. The KL Composite index in Malaysia lower 12.56 or 1.27% closed to 980.12.

The Kospi Index in South Korea decreased 14.27 or 1.05% to close at 1,339.83. SET index in Thailand closed higher 0.92 or 0.19% to 474.99 and JSE Index in Indonesia decreased 15.26 or 0.96% closed to 1,576.08. The Sensex index in India increased 42.80 or 0.38% closed to 11,371.85.