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Tuesday 16th of March 2010
July 14, 2006    

Tokyo equities fall on demand worries

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by Elaine Frei

Equities markets were down in Tokyo on Friday as investors in export-focused stocks worried that new rises in crude oil prices would dampen consumer demand in the United States. The decision by the Bank of Japan to raise interest rates for the first time in six years seemed not to have much of an effect on the markets at all, except perhaps in the banking sector.

The Nikkei 225 dropped 1.7 percent to 14,845.24, while the Topix index fell 1.9 percent to 1,521.71. It was the first time the Nikkei had gone below the 15,000 level in more than two weeks.

Sony was hurt not only by concerns about consumer demand but also by a decision in a European court that rescinded the European Union’s approval of an alliance with BMG. The ruling affected the music industry on a global scale and sent Sony’s shares 2.8 percent lower, to ¥4,790. Elsewhere in the electronics sector, Konica Minolta dropped 2.3 percent to ¥1,363, while Canon also declined by 2.3 percent, to ¥5,490. Matsushita Electric Industrial was down by 2.5 percent to ¥2,170.

The automobile manufacturing sector also saw losses. Nissan declined by 1.3 percent to ¥1,188. Honda and Toyota were each 1.7 percent lower, to ¥3,500 and ¥5,720 respectively. Mazda dropped 2.1 percent to ¥735.

Banks were down as investors lost confidence in the sector due to the increase in borrowing costs inherent in the rise in interest rates. Losses ranged from 2.2 percent, by Mizuho, which closed at ¥961,000, to the Bank of Yokohama’s 3.5 percent decline to ¥909.

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