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Market Update

Nikkei Drops 8.5% in January, Inflation in Japn Accelerates

Author: Hiruki Nakamura
Last Update: 2:03 AM ET January 31 2014

4:30 PM Tokyo Nikkei index in Tokyo declined 0.6% on Friday, fell 3.1% in the week and plunged 8.5% in January. Industrial output in December increased 1.1%. Consumer prices in Japan increased 1.6% and core inflation rose 1.3% from a year ago.

Market indexes in Japan and in Asia continued their downward slide and investors looked to international markets for direction.

On the economic front, the Ministry of Economy, Trade and Industry reported seasonally adjusted industrial output in December jumped 1.1% from November. Compared to year ago month industrial production climbed 7.3%.

For the fourth-quarter, industrial production climbed 1.9% on quarter.

The Ministry of Internal Affairs and Communications said overall nationwide consumer prices in December increased 1.6%, unchanged from the previous month.

Core inflation in food prices at annual rate was volatile and increased 1.3% on a monthly basis, overall inflation rose 0.1% and core Consumer Price Index was flat.

Core CPI in Tokyo grew 0.7% which was in-line with expectations and unchanged from the previous month. On a month basis, overall Tokyo CPI fell 0.4% and core inflation slid 0.6%.

The ministry added seasonally adjusted unemployment rate in December dropped 3.7% compared to 4% in November.

Additionally, department said average household spending climbed 0.7% from a year ago in December to 334,433 yen followed by 0.2% increase in November.

The Nikkei 225 Stock Average slipped 92.53 or 0.6% to 14,914.53 and the Topix index slid 3.45 to 1,220.64.

For the week, Nikkei 225 declined 3.1% and for the month tumbled 8.5%.

The yen fell to close at 102.47 against the U.S. dollar.

Stocks in Review

Toyota Motor Corp dropped 138 yen to 5,998 yen.

Honda Motor Co declined 101 yen to 3,903 yen after the carmaker reported net sales in the third-quarter ending in December soared 24.8% to 3.02 trillion yen from 2.42 trillion yen a year earlier.

Net income in the quarter surged 107.6% to 160.7 billion yen compared to 77.4 billion yen a year ago period.

Nissan Motor Co Ltd slumped 22 yen to 892 yen.

Sony decreased 39 yen to 1,651 yen.

Softbank Corp fell 144 yen to 7,675 yen. Fast Retailing Co slipped 595 yen to 38,765 yen.

Fujifilm Holdings Corp jumped 2.7% to 3,027 after the film and camera maker reported revenue in the third-quarter ending in December jumped 9.2% to 600.1 billion yen from 549.6 billion yen a year ago.

Net income in the quarter surged 68.9% to 31 billion yen compared to 18.4 billion yen a year earlier.

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