Nikkei drops 0.23% on tepid domestic economic data

GMT 18:31 2014 Friday ,29 August

Arab Today, arab today Nikkei drops 0.23% on tepid domestic economic data

The Nikkei stock index
Tokyo - XINHUA

The Nikkei stock index declined 0.23 percent Friday as Japan's tepid industrial output data coupled with rising tensions in Ukraine contrived to sour the market mood on the last trading day of the week.
The Nikkei 225 index dropped 35.27 points to close at 15,424.59, while the broader Topix index of all first-section shares fell 0. 22 percent, or 2.77 points, to close at 1,277.97.
Traders here pointed to data released earlier Friday by the Ministry of Economy, Trade and Industry, showing that Japan's industrial production came in weaker than expected in July.
According to the government report, factory output rose by only 0.2 percent on month, missing median economists' forecasts for a 1 percent increase.
Both domestic and overseas demand were seen to be sluggish in the recording period, owing to the April 1 tax hike and METI maintained its assessment on Japan's factory output saying that, " Industrial production has weakened."
"Among the data, a weaker-than-expected rebound in industrial output particularly weighed on the market," said Masashi Akutsu, an equity strategist at SMBC Nikko Securities Inc.
Other data causing investors to hold off on buying in the early session included the Ministry of Internal Affairs and Communications saying that Japan's unemployment rate dropped to 3. 8 percent in July from 3.7 percent the previous month, marking the second straight monthly increase.
The ministry said that the number of unemployed people rose by 40,000 from a month earlier to total 2.48 million.
In a separate report, the ministry also said average monthly household spending declined an inflation-adjusted 5.9 percent in July from a year before, marking the fourth straight run of declines, in a sign that the nation has been unable to shake off the negative effects of the April 1 tax hike.
Analysts here said that despite a pause in the yen's appreciation against the U.S. dollar in later trade allowing for the market to recoup some of its earlier losses, investors were reluctant to chase issues higher ahead of the Labor Day weekend in the U.S.
In addition, mounting concerns about tensions in Ukraine also sidelined some investors, brokers said, as satellite imagery and NATO sources have been used to suggest to global powers that thousands of Russian troops have entered eastern Ukraine and are fighting there.
NATO released satellite images that it claimed showed Russian armored vehicles and artillery had been crossing into Ukraine for at least a week. Moscow has denied the reports.
In currency trade the U.S. dollar was fetching 103.82 yen in the afternoon in Tokyo, compared to 103.75 yen in New York.
Toyota closed the week in negative territory, easing 0.11 percent to 5,928 yen and Canon dropped 0.38 percent to finish at 3, 399 yen.
Pioneer was another notable decliner Friday, falling 1.5 percent to 323 yen, after Pioneer and Sharp said Thursday they will dissolve their capital tie-up.
Sharp said it will sell its stake in Pioneer and the electronics maker closed up 0.9 percent at 328 yen.
Machine tool maker Okuma relinquished 1.7 percent to 835 yen, after Mitsubishi UFJ Morgan Stanley cut its rating on the company to "underperform" from "neutral" and lowered its share-price target to 700 yen from 840 yen.
Nikkei heavy Fast Retailing, operator of the Uniqlo chain of high street apparel stores, also slipped into negative territory Friday, edging down 0.35 percent to finish at 32,550 yen.
Heavily weighted mobile carrier SoftBank, however, leapt 3.4 percent to close the week at 7,506 yen.
Trading volume on Friday rose to 2.05 billion shares on the Tokyo Exchange's First Section, up from Thursday's volume of 2.03 billion shares, with declining issues outnumbering advancing ones by 949 to 694.

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