6:30 PM Tokyo – Tokyo stocks declined for the third day in a row and lawmakers in the lower house approve the plan to double sales tax to 10% and the measure is expected to pass in the upper house. Nippon Electric Glass Co declined after it lowered its income outlook.
Stocks in Tokyo fell and the Nikkei index declined to the low last seen in a week as international worries overshadow trading sentiment.
Japan’s lower house of the National Diet approved the plan to double the sales tax to 10% by 2015 after several members of opposition agreed to support the measure.
The bill is expected to be voted in favor in the upper house as two main opposition parties, Liberal Democractic Party and New Komeito party backed the reform.
The ruling Democratic Party of Japan was divided and according to the public broadcaster NHK 57 lawmakers failed to support the bill.
The Nikkei 225 Stock Average slumped 70.63 to 8,663.99 and the broader Topix index fell 6.33 to 738.89. For the June quarter, Nikkei is set to close down 14%, worst in two years.
The yen resumed its advance and closed at 79.35 against one dollar and rose to 99.32 against the euro.
Traders in Tokyo showed little enthusiasm for the upcoming meeting of European leaders and were also concerned that political leaders may not provide the support fast enough to bolster the government finances of Spain and Italy.
Traders also worried that Chinese economy may be slowing at a faster rate than the government reported indicators are suggesting.
Nippon Electric Glass Co. Ltd dropped 8% or 38 yen to 448 yen after the glassmaker lowered its net income estimate to breakeven compared to its previous estimate of profit between 500 million and 3.5 billion yen.
Kansai Electric Power Company, Inc was unchanged to 922 yen and Tokyo Electric Power decreased 6 yen to 160 yen.
Takashimaya Co. increased 2.6% to 590 yen after the retailer reported fiscal first quarter operating profit increased 69% to 5.88 billion yen.
Toyota Motor declined 35 yen to 3,045 yen and Honda Motor Co. dropped 41 yen to 2,620 yen and Nissan Motor Co Ltd slumped 8 yen to 720 yen.
Sony Corp plummeted 33 yen to close at 1,102 yen and Panasonic Corp closed down at 6 yen to 626 yen. Toshiba decreased 7 yen to 290 yen.
Renesas Electronics Corp slipped 19 yen to 306 yen and local media reports suggested that the company may sell 50 billion yen in stocks to a private equity group KKR.
Olympus Corp rose 3 yen to 1,209 yen, Nikon fell 2 yen to 2,373 yen and Fanuc Ltd slumped 10 yen to 12,610 yen. Canon Inc dropped 45 yen to 3,125 yen.
Komatsu Ltd decreased 11 yen to 1,855 yen and Hitachi Construction Machinery Co slid 5 yen to 1,476 yen after Chinese manufacturing shrank for the eight month in a row.
Inpex Corp fell 0.8% to 431,000 yen and Japan Petroleum Exploration Co. plummeted 56 yen to 2,893 yen as the prices of crude oil fell in international markets.
Mitsui O.S.K. Lines, Ltd decreased 9 yen to 272 yen; Kawasaki Kisen Kaisha, Ltd fell 4 yen to 150 yen and Nippon Yusen K.K. slid 4 yen to 205 yen.
Fast Retailing Co. gained 200 yen to 15,510 yen and J. Front Retailing Co. Ltd decreased 11 yen to 375 yen.
Mitsubishi UFJ Financial Group slipped 8 yen to 356 yen and Sumitomo Mitsui Financial Group dropped 31 yen to 2,470 yen. Nomura Holdings, Inc slid 6 yen to 275 yen.