TOKYO, February 15 – Japan’s Nikkei average fell 0.8 per cent on Monday, with worries about global growth after China’s lifting of banks’ reserve requirements outweighing better-than-expected Japanese gross domestic product data.
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A range of shares in companies that do business in China fell in the wake of Beijing’s latest measures to curb bank lending, with Komatsu , the world’s second-biggest maker of earth-moving machines, shedding 2.3 per cent.
Toyota fell 3 per cent after announcing on Friday that it would recall 8,000 pick-up trucks in the US, the latest in a series of recalls that have hurt the carmaker’s sales and its reputation for quality.
Tokyo shares received little cheer from data showing that Japan’s gross domestic product grew 1.1 per cent in October-December from the previous quarter, against forecasts of 0.9 per cent.
“The GDP was not too bad, but the factors market players are worried about right now are all issues that could pour cold water on the prospects for a further economic recovery,” said Masayuki Doshida of Matsui Securities.
Global stock markets have taken a hit over the past several weeks due to concerns that China’s efforts to curb bank lending may dent global economic growth, coupled with worries over Greece’s fiscal woes and a White House proposal to rein in banks’ risk-taking.
The fact that the GDP deflator, a broad gauge of price trends, fell a record 3 per cent in October-December from a year earlier took some of the shine off the better-than-forecast headline figure.
“GDP growth was better than expected, but the overall numbers show that Japan is still in deflation, and it still appears to be in a situation where it’s relying heavily on exports,” said Nagayuki Yamagishi of Mitsubishi UFJ Securities. “It will be very hard for Japan to escape this situation.”
The benchmark Nikkei share average fell 78.89 points to 10,013.30.
The broader Topix index dropped 1 per cent to 883.47.
With much of Asia closed for the lunar new year, and US markets closed for a holiday as well, Tokyo investors were reluctant to trade actively, market players said.
Trading volume dwindled to 1.7bn shares on the Tokyo exchange’s first section, the lightest so far this year.
Resource shares fell after copper and aluminium lost ground on Friday, hit by demand worries in the wake of the tightening move by China, the world’s largest metals consumer.
Mitsubishi lost 1.5 per cent to Y2,192 and fellow trader Mitsui shed 2.2 per cent to Y1,321.
Komatsu fell 2.3 per cent to Y1,776.
Shinsei Bank tumbled 6.7 per cent to Y97 after the Nikkei business daily said on Saturday that Shinsei and Aozora Bank, both owned by overseas investors, have decided not to merge in October as planned.
Aozora Bank edged up 0.9 per cent to Y110.
Shinsei said over the weekend that it had no comment on the report, while Aozora said on Monday it had made no decisions that need to be disclosed.
The reported failure of the talks follows dropped plans by brewers Kirin Holdings and Suntory to merge – all of which may have a longer-term negative impact on the market, said Masayoshi Okamoto of Jujiya Securities.
“This is making it look as if it is difficult for large mergers to take place in the Japanese market,” he said.
Toyota lost 3 per cent to Y3,355 after the company said on Friday it would recall 8,000 pick-ups due to possible cracks in a common drive shaft component that Ford and Nissan said posed no safety risk to their vehicles.
“Even though Toyota is dealing with the recall issue relatively quickly, it will still take several months to sort everything out,” said Mr Yamagishi.
