Japan GDP Declines at 14.2%; Nippon Steel Rises

123jump.com Staff
11 Jun, 2009
New York City

Japan first quarter GDP decline was revised to 14.2% from 15.2% on lower decline in capital spending. Stocks that are expected to benefit from the cyclical recovery in the economy closed higher. Steelmakers surged with Nippon Steel, Kobe Steel and JFE leading gainers.

[R]7:00 PM Tokyo, 6:00 AM New York – Japan first quarter GDP decline was revised to 14.2% from 15.2% on lower decline in capital spending. Stocks that are expected to benefit from the cyclical recovery in the economy closed higher. Steelmakers surged with Nippon Steel, Kobe Steel and JFE leading gainers.[/R]

Japan revised its first quarter economic contraction to 14.2% from its initial estimate of 15.2%. The Cabinet Office also revised the fourth quarter GDP decline to 13.5% to from 14.4%.

The exports decline of 26% was unrevised and capital spending decline was revised to 8.9% from the previous estimate of 10.4%.

The Nikkei 225 Index in Tokyo closed lower 10.16 or 0.10% to 9,981.33. Investors are increasingly focused on stocks that are driven by a cyclical rebound in the economy as manufacturers rebuild inventories.

Gainers & Losers

Nippon Steel Corp surged 5.7% to 393 yen, JFE Holdings increased 3.7% to 3,350 yen and Kawasaki Heavy Industries surged 8% to 270 yen. Kobe Steel surged 6% to 195 yen.

Vale SA based in Brazil also cut price for iron ore by 28% in the current fiscal year for Japanese steelmakers. Chinese steelmakers are seeking more than 35% price reduction.

Tokai Carbon added 5% to 510 yen and Yokogawa Electric surged 10.5% to 641 yen.

Olympus surged 13.1% to 2,365 yen after Deutsche Bank revised its price target to 3,230 yen and said that medical devices business will lead the recovery in the second half of this year.

Sanyo Electric added 6.9%to 262 yen.

Nikkei 200 Average Movers

Trend Micro Inc led the decliners in the Nikkei 225 index of 4.7% followed by losses in KDDI Corporation of 3.7%, in Furukawa Electric Co Ltd of 3.6%, in Nippon Light Metal Co Ltd of 3.4% and in Secom Co Ltd of 3.3%.

Olympus Corp led gainers in the Nikkei 225 index with a rise of 13.1% followed by gains in Yokogawa Electric Corporation of 10.5%, in GS Yuasa Corporation of 10.0% and Toshiba Corp of 8.1%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 10.16 or 0.10% to 9,981.33, Hang Seng index in Hong Kong increased 5.37 or 0.03% closed to 18,791.03, CSI 300 index in China lower 27.97 or 0.94% closed to 2,961.63. ASX 200 index in Australia increased 22.80 or 0.57% closed to 4,047.20. The KL Composite index in Malaysia higher 5.99 or 0.55% closed to 1,088.96.

The Kospi Index in South Korea increased 4.51 or 0.32% to close at 1,419.39.SET index in Thailand closed higher 2.52 or 0.40% to 627.07 and JSE Index in Indonesia decreased 19.23 or 0.91% closed to 2,089.58. The Sensex index in India decreased 55.34 or 0.36% closed to 15,411.47.