Japan Service Index Falls, Stocks Weak

Darlington Musarurwa
20 Jan, 2010
New York City

Stocks in Japan traded flat as investors await earnings from banks, exporters and trading companies in few weeks. Resource stocks showed a negative bias. Japan demand for services fall 0.2% in November. Tokyo condo supply falls 16.8% in 2009.

[R]5:00 AM New York, 7:00 PM Tokyo – Stocks in Japan traded flat as investors await earnings from banks, exporters and trading companies in few weeks. Resource stocks showed a negative bias. Japan demand for services fall 0.2% in November. Tokyo condo supply falls 16.8% in 2009.[/R]

The benchmark stock index decreased 0.3% as brokerages tumbled following a downgrade from Credit Suisse Group AG.

News that demand for services dropped in November and Tokyo condo supply decreased the most in 17 years in 2009 also unnerved investors.

In Tokyo trading Nikkei 225 Stock Average declined 0.3% or 27.38 to 10, 737.52, and the broader Topix Index fell 0.5% to 944.72.

In the first section of the Tokyo Stock Exchange 12 billion shares worth 641 billion yen were traded and in the second section 167 million shares valued at 1.4 billion yen changed hands.

Of the Nikkei 225 index stocks, 67 advanced, 144 dropped, and 13 were unchanged. Toyota Tsuho led gainers in the index shares with a rise of 6% followed by Hitachi Ltd jumping 5.3%.

Services Index Falls 0.2% in Nov

Japan’s Ministry of Economy, Trade and Industry reported that the Tertiary Industry Activity, which gauges demand for services, dropped 0.2% to 96.6 in November in seasonally adjusted terms.

Industries that contributed to the increase were wholesale and retail trade 0.7%; accommodations, eating and drinking services 2.4%; scientific research, professional and technical Services 1.3%, information and communications 0.6% and medical, health care and welfare 0.6%.

METI also noted that industries that contributed to the increase were miscellaneous services (except government services etc) with 2.1%; electricity, gas, heat supply and water with 1.5%; living-related and personal services and amusement services with 1%; real estate and goods rental and leasing with 0.5%; finance and insurance with 0.4%; transport and postal activities with 0.2% and compound services with 2.2%.

Learning support was flat in the period.

Tokyo Condo Supply Falls 16.8% in 2009

Japan Today reported that the Real Estate Economic Institute said today the number of condominiums put on sale in the greater Tokyo area fell 16.8% to 36,376 units in 2009, dropping below 40,000 for the first time in 17 years.

New condo prices fell 5% to an average 45.35 million yen, also falling for the first time in seven years.

An average 69.7% of the condos that went on sale in a given month in Tokyo and in Kanagawa, Saitama and Chiba during the year found buyers at the end of the month, reflecting an increase of 7 percentage points from a year earlier.

Nomura Becomes New Entrant of ASX

Nomura reported today it has been admitted as a trading partner on the Australian Securities Exchange, which allows it to place stock orders directly into the exchange’s trading system.

Sojitz to Book Loss on 15 billion Yen on JAL

Sojitz Corp. announced today that it will book a valuation loss on its 15 billion yen in Japan Airlines Corp. preferred shares, in the December quarter.

Separately, Nikkei News said JAL creditors will take a 358.5 billion yen hit is debt waivers after the carrier sought a court-led rehabilitation.

Mizuho Financial Holdings holds 95.1 billion yen in claims in the troubled carrier, while Sumitomo Trust & Banking Co. has 28.1 billion yen in claims.

Nikkei Movers

Japan Tobacco Inc led the decliners in the Nikkei 225 Stock Average with a loss of 4.1% followed by losses in Kawasaki Kisen Kaisha, Ltd of 4.0%, in Nomura Holdings, Inc of 3.7%, in Matsui Securities Co Ltd 3.6% and in Tosoh Corporation 3.0%.

Toyota Tsusho Corporation led gainers in the Nikkei 225 Stock Average with a rise of 5.9% followed by gains in Hitachi, Ltd 5.2%, in NSK Ltd of 5.1% and in Dentsu Inc of 4.9%.

Other Movers

Dowa Holdings Co gained 3.1% to ¥561.00 after the metal-products smelter on a broker rating revision.

Fuji Heavy Industries Ltd the maker of cars rose 2% to ¥450.00.

Hitachi Kokusai Electronic Inc the maker of chip- manufacturing equipment added 3.3% to ¥870.00.

Japan Airlines Corporation plunged 60% to ¥2 after the carrier filed for bankruptcy protection.

Japan Tobacco Inc fell 4.1% to ¥316,000.

Mizuho Financial Group, Inc decreased 1.0% to ¥185.00 and the financial services firm and Taiwan''s Economy Ministry''s Department of Investment Services signed a memorandum of understanding to help companies from the two economies work together to expand both domestically and in fast-growing markets such as China and Vietnam.

Nomura Holdings, Inc declined 3.7% to ¥711.

Sanei-International Co increased 5.3% to ¥1,119 after the apparel maker was upgraded to “buy” from “neutral” at Nomura Holdings Inc.

Sojitz Corporation decreased 0.5% to ¥183.00 after it announced that it expects ¥15 billion extraordinary loss on revaluation of investment in securities for the third quarter of the fiscal year ending March.

Softbank Corp gained 3.4% to ¥2,433.00 after the mobile carrier was recommended by Citigroup Global Markets Japan Inc.

Suzuken Co advanced 4% to ¥3,190.00 after the drug wholesaler was upgraded by Barclays Plc.