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Market Update

Eighth Monthly Trade Deficit in Japan, Kuroda Faces Skeptics

Author: Hiruki Nakamura
Last Update: 10:14 AM ET March 21 2013

6:30 PM Tokyo – Stocks in Tokyo closed higher and Governor of Bank of Japan faced criticism of 2% inflation target at his first press conference. Japan recorded its eighth monthly trade deficit and the yen declined 0.6%.

Stocks in Tokyo rebounded ahead of comments from the newly appointed Governor of Bank of Japan and a private survey indicated acceleration in Chinese manufacturing.

Expectations were high that the central bank will bring forward asset purchase program and set higher inflation target.

After the market close, Governor Kuroda reassured investors that he is confident in reaching 2% inflation target and if necessary he may bring forward the asset purchase timetable. However, he deflected the questions about scheduling an emergency meeting ahead of the meeting on April 3-4.

Several market participants and economists questioned central bank’s abilities to create and hold on to 2% inflation target as much of the deflation is structural resulting from the lack of growth in aggregate demand.

Separately, Finance Ministry also reported exports declined 2.9% in February and imports increased 11.9% resulting in trade deficit of 777.5 billion yen. Japan recorded its eighth monthly deficit in a row, the longest in nearly three decades.

Exports to China decreased 15.8% on the weeklong holiday in China in the month and shipments to Europe declined 9.6% but increased 5.7% to the U.S.

The yen gained 0.6% against the dollar and closed at 95.42.

The Nikkei 225 Stock Average increased 167.46 or 1.3% to 12,635.69 and the broader Topix Index gained 12.21 or 1.2% to 1,058.10.

Newly appointed Haruhiko Kuroda is scheduled to take over as Governor of Bank of Japan from tomorrow and the U.S. Federal Reserve Bank is set to begin its two-day meeting later in the day.

Stocks in Review

Toray Industries increased 6% to 651 yen after the fiber maker said it plans to invest 56 billion yen in Thailand by 2020.

Toyota Motor Corp advanced 50 yen to 4,990 yen and Honda Motor Co. slid 10 yen to 3,770 yen and Nissan Motor Co Ltd gained 18 yen to 975 yen. Yamaha Motor Co Ltd fell 6 yen to 1,325 yen.

Nippon Steel down 3 yen to 250 yen and JFE Holdings Inc up 1 yen to 1,906 yen.

Sony jumped 29 yen to 1,690. Canon Inc climbed 45 yen to 3,535 yen and Nikon fell 5 yen to 2,326 yen. TDK Corp slipped 5 yen to 3,440 yen.

Nintendo Co. Ltd slumped 60 yen to 10,530 yen.

Machinery makers gained after the latest manufacturing survey in China accelerated in March, according to HSBC Holdings Plc and Markit Economics.

Fanuc Corp. soared 750 yen or 5.1% to 15,360 yen and Komatsu Ltd rose 16 yen to 2,268 yen. Hitachi Construction Machinery Co increased 23 yen to 2,089 yen.

Softbank Corp surged 185 yen or 5.1% to 3,850 yen.

FamilyMart Co Ltd, the convenience chain operator added 40 yen to 4,280 yen and Lawson gained 60 yen to 7,110 yen. Ito En Ltd gained 41 yen to 2,113 yen.

Seven & I Holdings Co climbed 135 yen or 4.6% to 3,075 yen. Fast Retailing Co. jumped 600 yen to 30,700 yen and J. Front Retailing Co. Ltd increased 19 yen to 710 yen.

Mitsubishi UFJ Financial Group up 9 yen to 577 yen and Sumitomo Mitsui Financial Group closed unchanged at 4,000 yen. Dai-Ichi Life rose 0.9% to 125,600 yen. Nomura Holdings, Inc gained 13 yen to 591 yen.

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc