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Nikkei down 2% on firmer yen

Nikkei down 2% on firmer yen
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First Published: Thu, Jun 19 2008. 12 02 PM IST
Updated: Thu, Jun 19 2008. 12 02 PM IST
By Aiko Hayashi / Reuters
Tokyo: Japan’s Nikkei share average slid 2% on 19 June, led lower by exporters such as Honda Motor Co on a firmer yen and worries about a weak US economy, a major destination for world exports.
Bank shares including top lender Mitsubishi UFJ Financial Group took a beating on concerns the credit crisis was tightening its grip on commercial banks hit their US counterparts.
“It seems the United States wants to curb inflation even if it risks slowing down the economy,” said Takahiko Murai, general manager of equities at Nozomi Securities.
“Exports support Japan’s economy and there’s no way Japan won’t be affected. Shanghai and Vietnamese stocks are already eroding,” Murai added.
A rare bright spot was battery maker GS Yuasa Corp, which jumped 3.9% to book a lifetime high as investors see a promising future for next-generation car batteries and electric cars amid surging oil prices and worries about global warming.
GS Yuasa was the most actively traded stock in terms of both volume and value on the Tokyo Stock Exchange.
Masayoshi Okamoto, head of dealing at Jujiya Securities, said that because stocks like GS Yuasa were the most actively traded, it indicated a lack of direction in the market in the face of the global economic slowdown.
The benchmark Nikkei ended morning trade down 293.42 points at 14,159.40. The broader Topix slipped 2.1% 1,379.42.
The dollar edged down 0.2% to 107.65 yen pulling further away from a four-month high of 108.59 yen struck earlier this week.
The Dow Jones industrial average sank to its lowest close in three months on Wednesday as worries about a weak economy compounded credit sector concerns and drove shares of banks, autos and transport companies sharply lower.
Exporters, banks slip
Exporter Honda skidded 3.7% to 3,690 yen and Canon Inc fell 1.8% 5,460 yen.
Toyota Motor Corp lost 2.8% to 5,510 yen after the automaker said it was cutting US production of its full-size pickup trucks further this year as record gasoline prices have depressed sales of gas-hungry trucks and SUVs.
Japanese bank shares fell, with Mitsubishi UFJ dropping 3.5% to 1,039 yen.
Second-ranked Mizuho Financial Group declined 2.8% to 554,000 yen and Sumitomo Mitsui Financial Group, the third-biggest bank, gave up 3.8% to 904,000 yen.
Adding to the already bleak outlook for bank stocks, Fifth Third Bancorp said on Wednesday the Midwestern bank would cut its dividend and raise $2 billion in capital.
Among gainers, Sanyo Electric rose 3% to 279 yen after saying on 19 June that it plans to double annual production of rechargeable batteries to 50 million as more consumers choose the economical and environmentally friendly alternatives.
Trade was moderate on the Tokyo exchange’s first section, with 1 billion shares changing hands, almost in line with last week’s morning average. Declining stocks outpaced advancing ones by a ratio of nearly 7 to 1.
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First Published: Thu, Jun 19 2008. 12 02 PM IST
More Topics: Markets | Japan | Stocks | Nikkei | Topix |