Business

Friday November 20, 2009

Japan's Nikkei index falls to 4-month low Friday


TOKYO: Japan's Nikkei stock index fell to a four-month low Friday, pressured by uncertainty over the government's handling of the deflation-plagued economy.

The benchmark Nikkei 225 stock average lost 51.79 points, or 0.5 percent, to 9,492.74, the lowest finish since July 17 when the key index closed at 9,395.32.

It also marked the fourth consecutive day of decline.

During the week, the Nikkei index lost 2.8 percent.

The broader Topix edged up 0.1 percent to 838.71.

Shortly before the market's close, the government said the world's second largest economy is in deflation for the first time in more than three years, warning falling prices and a further worsening of the labor market could drag on the weak recovery.

"We cannot see what the government will do to tackle deflation," said Kazuhiro Takahashi, equity strategist at Daiwa Securities SMBC Co. Ltd.

The statement about deflation, which was approved by Prime Minister Yukio Hatoyama's Cabinet, is hardly a surprise as Japan's consumer price index has been declining since March.

But it shows Japanese leaders are clearly worried about the trend.

Takahashi said overnight losses on Wall Street Thursday also depressed sentiment in Tokyo.

Investors sold shares to adjust positions ahead of a long weekend. Japan's financial markets are closed Monday due to a public holiday.

Among blue chips, Sony Corp. lost 2.4 percent to 2,140 yen even though the company said Thursday it aimed to be profitable in gaming and flat-panel TVs by the fiscal year ending March 2011.

Takahashi said investors were skeptical that Sony could reach the goal under its turnaround strategy.

Toyota Motor Corp. - the world's No. 1 automaker - fell 1.4 percent to 3,440 yen. Honda Motor Co. declined 0.5 percent to 2,725 yen.

Panasonic Corp. rose 1.5 percent to 1,160 yen.

In currencies, the dollar fell to 88.84 yen in afternoon trade Friday from 88.98 yen in New York late Thursday. The euro fell to $1.4905 from $1.4922. - AP


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