Tue, Sep 15, 2015 page15

• Japan’s stocks decline, led by mobile carriers

  • Bloomberg
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  Japanese stocks fell, dragged down by mobile carriers after Japanese Prime Minister Shinzo Abe called for lower phone rates.

  NTT DoCoMo Inc, KDDI Corp and Softbank Group Corp sank at least 5.5 percent yesterday after Abe said reducing the burden on households from mobile phone fees is an important issue to tackle. Energy explorer Inpex Corp declined 5 percent after Goldman Sachs Group Inc said oil prices could fall as low as US$20 per barrel.

  Kansai Electric Power Co climbed 1.5 percent as utilities led gains on the TOPIX. Shipper Kawasaki Kisen Kaisha Ltd jumped 1.8 percent after Mitsubishi UFJ Morgan Stanley Securities Co raised its investment rating.

  The TOPIX slipped 1.2 percent to 1,462.41 at the close of trading in Tokyo, swinging from a gain of 0.5 percent after last week capping its biggest weekly increase in almost two months. Volume was 29 percent below the 30-day average. The Nikkei 225 Stock Average dropped 1.6 percent to 17,965.70. Both the US Federal Reserve and Bank of Japan (BOJ) are holding policy meetings this week.

  “Calling costs are high and while that’s good news for consumers, the stocks are falling on the same theme,” Toyo Securities Co Tokyo-based strategist Hiroaki Hiwada said.

  “Investors are passing over the market ahead of the BOJ and FOMC [Federal Open Market Committee] policy meetings,” Hiwada said.

  Heightened volatility in financial markets since China unexpectedly devalued its currency last month and signs the country’s economic slowdown is deepening have injected extra uncertainty into the debate over whether the Fed might raise US interest rates on Thursday.

  While futures traders see a 28 percent chance of an increase, economists surveyed by Bloomberg are about evenly split on whether the Fed could move.

  China’s industrial output rose 6.1 percent in last month from a year earlier, the National Statistics Bureau said on Sunday, below the 6.5 percent median estimate of economists surveyed by Bloomberg.

  Fixed-asset investment climbed 10.9 percent in the first eight months, compared with a median projection of 11.2 percent.

  The weaker industrial and investment figures underscore the challenge the government faces in meeting its growth target of 7 percent this year, as exports decline and producer price deflation deepens.

  “The slowdown in China is continuing,” Okasan Securities Co chief equity strategist Shoji Hirakawa said.

  “The fact that investment is slowing down is especially worrying, and it’s negative if you see it as proof that China’s policies have been unsuccessful so far,” Hirakawa said.

  The Bank of Japan is to maintain its policy stance at a meeting today, according to all but two of 35 analysts polled by Bloomberg. The BOJ is to expand easing on Oct. 30, according to 11 economists in the Bloomberg survey taken from Sept. 7 to Sept. 10. Of the total respondents, 13 said they do not expect any stimulus at all.

  E-mini futures on the S&P 500 Index lost 0.1 percent after the underlying measure rose 0.5 percent on Friday.

  “There’s a lack of enthusiasm,” Mirabaud Asia Ltd director of trading Andrew Clarke said.

  “We have the BOJ tomorrow, the Fed on Thursday, and the question is what does China do next? Numbers over the weekend were not good out of China. I guess some expect some sort of easing measures,” he said.

  NTT DoCoMo plunged 9.8 percent, while KDDI tumbled 8.6 percent. Softbank slumped 5.5 percent. Mobile phone bills have become too high and are a burden on family budgets, Abe said at an economic conference on Friday, Kyodo news service reported.

  Inpex dropped 5 percent, the most since January. Japan Drilling Co lost 0.9 percent. Hokuriku Electric Power Co gained 3.3 percent, Kansai Electric rose 1.5 percent and Shikoku Electric Power Co added 2.8 percent.

  While US$20 per barrel of oil is not Goldman’s base-case scenario, a failure to reduce production fast enough might require prices near that level to clear the oversupply, the bank said in a report e-mailed on Friday, while trimming its Brent and WTI crude forecasts through next year.

  Kawasaki Kisen gained 1.8 percent, with the TOPIX Marine Transportation Index rising 0.3 percent. Mitsubishi UFJ raised its rating on the stock to overweight from neutral.
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