CPI Drops in Japan, Eleventh Monthly Decline

Darlington Musarurwa
26 Feb, 2010
New York City

Japan

[R]5:00 AM New York, 7:00 PM Tokyo - Japan’s industrial production increase 2.5% in January. Consumer prices declined in Japan for the eleventh month in a row as higher unemployment and declining wages curb consumer spending.[/R]

Japan’s stock indexes rose after the January industrial production rose for the eleventh month in a row, according to a government report. Prices excluding food declined 1.3% in the month and dropped 1.2% excluding food and energy.

However, production is expected to fall in February.

In Tokyo trading Nikkei 225 Stock Average gained 0.2% or 24.07 to 10,126.03, and the broader Topix Index edged up 0.3% to 894.10.

In the first section of the Tokyo Stock Exchange 7.2 billion shares worth 494 billion yen were traded and in the second section 116 million shares valued at 1.4 billion yen changed hands.

Of the Nikkei 225 index stocks, 126 gained, 8 fell, and 18 were unchanged. Nippon Light Metal led gainers in the index shares with a rise of 4.1% followed by Mazda Motor Corp. jumping 4%.

Industrial Production Advanced 2.5%

Japan’s Ministry of Industry Trade and Economy reported today that the country’s industrial production rose 2% in January from the previous month, rising for the eleventh month in a row.

Production index advanced 18.2% to 91.9 from a year ago.

Industries that contributed to the increase are transport equipment; chemicals (excluding drugs) and fabricated metals in that order.

Commodities that mainly contributed to the increase are large passenger cars; drive, transmission and control parts and bearings, correspondingly.

The METI noted that a survey of production forecast in manufacturing indicated that production is projected to decrease 0.8% in February and rise 1.6% in March.

Industries that contributed to the decrease in February are electronic parts and devices; information and communication electronics equipment and transport equipment, in that order.

Industries contributing to increase in March are electronic parts and devices; electrical machinery and transport equipment, respectively.

The report notes that shipments in January increased 2.4% from the previous month and gained 19.3% to 92.7.

Inventory in January increased 1% from the previous month and fell 12.6% from the previous year.

CPI Fell 0.2% in January

Statistics Bureau of Japan reported today that Consumer Price Index fell 0.2% to 99.4 in January and fell 1.3% from a year ago.

Also the consumer price index for Ku-area of Tokyo, which is a gauge of prices in Japan, decreased 1.8% to 98.6 in February from the same period a year earlier.

Nikkei Movers

Meidensha Corp led the decliners in the Nikkei 225 Stock Average with a loss of 3.9% followed by losses in Oki Electric Industry Company, Limited of 2.8%, in Pioneer Corp of 2.4%, in Kirin Holdings Company, Limited 2.3% and in NGK Insulators Ltd 2.1%.

Nippon Light Metal Company, Ltd led gainers in the Nikkei 225 Stock Average with a rise of 4.0% followed by gains in Mazda Motor Corporation 4.0%, in Clarion Co Ltd of 3.9% and in Aeon Co Ltd 2.9%.

Other Movers

Fanuc Ltd the maker of industrial robots rose 0.2% to 8,680 yen.

Isuzu Motors Ltd added 2.2% to 223.00 yen after the maker of light-duty trucks gains after Citigroup raises its rating and outlook on the company.

Mazda Motor Corporation rose 4.0% to 234.00 yen after total domestic production volume in January increased to 69,291 vehicles for the second consecutive month, growing 122.6% compared to January 2009 on higher production of passenger vehicles.

Toshiba Corp declined 0.2% to 445.00 yen after the company and its China subsidiary, Toshiba Semiconductor (Wuxi) Co. Ltd signed an agreement with Nantong Fujitsu Microelectronics Co. Ltd to form a manufacturing joint venture in China for the semiconductor back-end process.