Tokyo shares fall, yen weakens after industrial output fell in March
Thursday, April 28, 2005 12:55:52 AM
afxpress.com
TOKYO (AFX) - Japanese stocks fell and the yen weakened against both the US dollar and euro after the government announced that industrial production unexpectedly fell in March
Just minutes before stock trading began, the government reported that industrial output in March fell a seasonally-adjusted 0.3 pct from the previous month
Production was expected to remain flat, according to the average of the forecasts in a Nihon Keizai Shimbun survey of 22 brokerage houses and economic research institutes. The estimates ranged from a decline of 0.9 pct to an increase of 0.5 pct
METI itself forecast that output would increase 0.9 pct in March
Year-on-year, output increased 1.1 pct
Stocks fell in early trading and the yen weakened despite the government's forecast that industrial output will rise 3.5 pct in April, and the release of another report showing retail sales unexpectedly rose last month, a hopeful sign of a long expected upturn in consumer spending
The Nikkei 225 Stock Average opened down 26.37 points at 10,979.05. After 12 minutes of trading, the blue chip marker was down 25.41 points or 0.2 pct at 10,980.01
The TOPIX index of all First Section shares fell 5.05 points or 0.45 pct to 1,125.49
On the currency market, the dollar was trading at 106.07 yen, compared to 105.92 yen just before the industrial output data was released
The euro was trading at 137.24 yen, compared to 136.90 yen just ahead of the March factory output report. Ahead of the start of trading, brokers had expected stocks to open little changed. The boost to sentiment provided by the sharp drop overnight in global oil prices, which prompted US stocks to rise, was expected to be offset by the reluctance of many investors to trade ahead of the start tomorrow of the long Golden Week holiday period in Japan
The uneven nature of earnings results released so far by major Japanese companies during one of the busiest reporting weeks of the current period was also expected to inhibit trading. But the sales report data would have come as a pleasant surprise
The Ministry of Economy, Trade and Industry reported that retail sales last month rose 0.6 pct from a year earlier, the second increase in three months
That came as somewhat of a surprise, following the release last week of data showing declines in sales at supermarkets, department stores and convenience store sales nationwide
Supermarket sales fell 4.2 pct last from a year earlier, the 16th decline in 17 months, the Japan Chain Stores Association reported
Department store sales dropped 2.9 pct from a year earlier, the 12th decline in 13 months, the Japan Department Stores Association said
And convenience store sales on a same-store basis fell 1.4 pct, the 22nd drop in the past 25 months, according to the Japan Franchise Association. Consumer spending, which underpins 55 pct of the economy, is being counted on to keep the economy on a recovery track if the nation's trade surplus -- the traditional driver of Japanese economic growth -- continues to decline |
