Revised Japan Economic Views; Retailers Rise

123jump.com Staff
26 May, 2009
New York City

Investors in Japan focused on weak global market conditions and prospect of rising inflation as metals and energy prices stay elevated. Revised economic outlook from the Cabinet Office and the Bank of Japan failed to sway financial markets. Real estate developers and retailers closed higher.

[R]7:00 PM Tokyo, 8:00 AM New York – Investors in Japan focused on weak global market conditions and prospect of rising inflation as metals and energy prices stay elevated. Revised economic outlook from the Cabinet Office and the Bank of Japan failed to sway financial markets. Real estate developers and retailers closed higher.[/R]

Markets in Japan and in Asia closed lower after North Korea exploded nuclear device at an underground site and then fired two more short-range missiles today.

The back-to-back weapons testing from North Korea prompted calls in Japan for preemptive strikes.

The Nikkei 225 Index in Tokyo closed lower 36.19 or 0.39% to 9,310.81.

The Cabinet Office in a report yesterday cautioned that economy is still in a tough spot but estimated that industrial production and exports are stabilizing. It left its view of weak and continuing deterioration in labor market and did not revise its views on corporate profit, business investment and private consumption.

Yesterday the Bank of Japan revised its view on the economic and financial condition.

However, traders mostly ignored both views and focused on the global market conditions.

Gainers & Losers

Real estate investment trusts surged in trading today partly after Mitsubishi UFJ raised its rating on Sumitomo Realty & Development Co. The third largest real estate developer surged 3.4% to 1,346 yen and Nippon Building Fund increased 3% to 805,000 yen. Nippon Residential Investment Corp surged 10% to 177,800 yen.

Electronics manufactures declined after memory prices stayed weak and Taiwan export orders were down more than 20% in April.

Tokyo Electron edged lower 3.2% to 4,230 yen, NEC Electronics declined 3.7% to 898 yen and Mitsubishi Electric Corp dropped 3.05% to 540 yen. Fanuc Ltd dropped 1.7% to 7,410 yen.

The strength in metals markets lifted stocks of trading companies. Mitsui Minerals & Metals increased 5.5% to 232 yen and Mitsubishi Materials increased1% to 298 yen.

Retailers also closed higher after two revised economic views from the government and the Bank of Japan. Nitori Co surged 8.5% to 5,850 yen, ABC Mart surged 8.5% to 2,140 yen, J Front Retailing increased 2.5% to 406 yen and Isetan Mitsukoshi added 2.1% to 861 yen.

Nikkei 200 Average Movers

Teijin Limited led the decliners in the Nikkei 225 index of 4.7% followed by losses in Toyobo Co. Ltd of 4.0%, in Denki Kagaku Kogyo KK of 3.8%, in Hino Motors Ltd of 3.7% and in Alps Electric Co Ltd of 3.6%.

Mitsui Mining & Smelting Co Ltd. led gainers in the Nikkei 225 index with a rise of 5.4% followed by gains in Nippon Sheet Glass Co Ltd. of 5.1%, in Daikin Industries Ltd, of 4.2% and Taisei Corp. of 3.4%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 36.19 or 0.39% to 9,310.81, Hang Seng index in Hong Kong decreased 130.26 or 0.76% closed to 16,991.56, CSI 300 index in China lower 32.95 or 1.20% closed to 2,719.76. ASX 200 index in Australia increased 50.50 or 1.35% closed to 3,788.40. The KL Composite index in Malaysia lower 1.51 or 0.14% closed to 1,051.63.

The Kospi Index in South Korea decreased 28.86 or 2.06% to close at 1,372.04. SET index in Thailand closed lower 7.82 or 1.42% to 542.69 and JSE Index in Indonesia decreased 33.38 or 1.77% closed to 1,857.59. The Sensex index in India decreased 323.99 or 2.33% closed to 13,589.23.